|
Delaware
|
|
1-5759
|
|
65-0949535
|
(State or other jurisdiction of incorporation
incorporation or organization)
|
|
Commission File Number
|
|
(I.R.S. Employer Identification No.)
|
Title of each class:
|
Trading Symbol(s)
|
Name of each exchange on which registered:
|
Common stock, par value $0.10 per share
|
VGR
|
New York Stock Exchange
|
☑
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging Growth Company
|
|
|
|
Page
|
|
|
|
|
|
|
|||
|
|||
|
|||
Item 16.
|
Form 10-K Summary
|
||
EX-4.12
|
|
||
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
|
•
|
Tobacco: the manufacture and sale of cigarettes in the United States through our Liggett Group LLC (“Liggett”) and Vector Tobacco Inc. (“Vector Tobacco”) subsidiaries, and
|
•
|
Real Estate: 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 100% 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 Florida, California, Connecticut, Massachusetts, Colorado, New Jersey and Texas.
|
•
|
Continuing to offer the best value proposition in the U.S. cigarette industry by consistently delivering high quality products within the discount segment;
|
•
|
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 (EAGLE 20’s, PYRAMID, GRAND PRIX, LIGGETT SELECT and EVE) and utilize core brand equity to selectively build distribution;
|
•
|
Selectively expand the portfolio of partner brands and private label brands utilizing a pricing strategy that offers long-term price stability for customers;
|
•
|
Increase operational efficiency by developing and adopting an organizational structure to maximize profit potential; and
|
•
|
Identify, develop and launch relevant new tobacco products to the market in the future.
|
•
|
Continue to expand Douglas Elliman’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; and
|
•
|
Invest our excess funds opportunistically in real estate situations that we believe can maximize stockholder value.
|
•
|
EAGLE 20’s — a brand positioned in the deep discount segment for long-term growth re-launched as a national brand in 2013; EAGLE 20’s represented 59.9.% of Liggett’s unit volume in 2019, 53.5% in 2018 and 44.4% in 2017. EAGLE 20’s is now the largest seller in Liggett’s family of brands,
|
•
|
PYRAMID — the industry’s first deep discount product with a brand identity relaunched in the second quarter of 2009; PYRAMID represented 26.5% of Liggett’s unit volume in 2019, 32.5% in 2018 and 39.4% in 2017,
|
•
|
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.
|
•
|
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;
|
•
|
requires FDA to establish “good manufacturing practices” to be followed at tobacco manufacturing facilities;
|
•
|
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.
|
•
|
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
|
•
|
repayment of $169.6 million in aggregate principal amount of our 5.5% Variable Interest Senior Convertible Notes due April 2020 (which we intend to repay using proceeds from the November 2019 offering of $230.0 million aggregate principal of unsecured notes;
|
•
|
cash interest expense of approximately $116.8 million,
|
•
|
dividends of approximately $124.9 million based on the anticipated quarterly cash dividend rate of $0.20 per share and assuming 152,542,029 shares outstanding (148,084,900 common shares outstanding as of December 31, 2019 and 4,457,129 employee stock options with dividend equivalent rights), 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 certain preferred stock;
|
•
|
pay dividends or distributions on, or redeem or repurchase, capital stock or subordinated indebtedness, or make other restricted payments;
|
•
|
create or incur liens with respect to our assets;
|
•
|
make investments, loans or advances;
|
•
|
incur dividend or other payment restrictions;
|
•
|
prepay subordinated indebtedness;
|
•
|
enter into certain transactions with affiliates; and
|
•
|
merge, consolidate, reorganize or sell our assets, or use asset sale proceeds.
|
•
|
Federal, state and local laws have limited the advertising, sale and use of cigarettes in the United States, such as laws prohibiting smoking in restaurants and other public places. Private businesses have also implemented prohibitions on the use of cigarettes. Further regulations or rules limiting advertising, sale or use of cigarettes or ingredients or flavorings could negatively impact sales of cigarettes, which would have an adverse effect on our results of operations.
|
•
|
The federal government, as well as certain state, city and county governments, impose excise taxes on cigarettes, which has had, and is expected to continue to have, an adverse effect on sales of cigarettes. Since certain of these excise taxes were proportionately smaller on other types of tobacco products, a dramatic increase in the sale of mislabled pipe tobacco occurred, which took away market share from traditional cigarette products.
|
•
|
Various state and local government regulations have, among other things, increased the minimum age to purchase tobacco products, banned the sale of menthol cigarettes, restricted or banned sampling and advertising and required ingredient and constituent disclosure. Significantly, the federal government increased the minimum age of sale for tobacco products from 18 to 21 years of age in December 2019. Further regulations that limit the group of individuals able to purchase cigarettes in the United States or other regulations that limit the types of products we can offer, such as limitations on use of flavoring, could have a material adverse effect on demand for our products, our results of operations and our business. FDA and other organizations have also conducted anti-tobacco media campaigns, which have and may continue to have an adverse effect on the demand for cigarettes.
|
•
|
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 the U.S. housing and mortgage markets, and potential limits on, or elimination of, the deductibility of certain mortgage interest expense and property taxes;
|
•
|
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;
|
•
|
acts of God, such as hurricanes, earthquakes and other natural disasters, or acts or threats of war or terrorism; and/or
|
•
|
adverse changes in global, national, regional and local economic and market conditions, particularly in the New York metropolitan area, including those relating to pandemics and health crises, such as the recent outbreak of novel coronavirus (COVID-19).
|
•
|
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;
|
•
|
our dividend payment ratio and level;
|
•
|
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
|
|
27
|
|
|
New York City, NY
|
|
Leased
|
|
187,000
|
|
Offices
|
|
39
|
|
|
Long Island, NY
|
|
Leased
|
|
112,000
|
|
Offices
|
|
22
|
|
|
Florida
|
|
Leased
|
|
49,000
|
|
Offices
|
|
6
|
|
|
Westchester County, NY
|
|
Leased
|
|
11,000
|
|
Offices
|
|
23
|
|
|
California
|
|
Leased
|
|
107,000
|
|
Offices
|
|
8
|
|
|
Other
|
|
Leased
|
|
10,000
|
|
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
|
|
12/14
|
12/15
|
12/16
|
12/17
|
12/18
|
12/19
|
||||||
Vector Group Ltd.
|
100
|
|
125
|
|
136
|
|
151
|
|
77
|
|
127
|
|
S&P 500
|
100
|
|
101
|
|
113
|
|
138
|
|
132
|
|
174
|
|
S&P 600
|
100
|
|
98
|
|
124
|
|
140
|
|
128
|
|
157
|
|
S&P MidCap 400
|
100
|
|
98
|
|
118
|
|
137
|
|
122
|
|
154
|
|
NYSE Arca Tobacco
|
100
|
|
121
|
|
154
|
|
171
|
|
133
|
|
176
|
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
October 1 to October 31, 2019
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
November 1 to November 30, 2019
|
1,529,512
|
|
|
12.46
|
|
(1)
|
—
|
|
|
—
|
|
|
December 1 to December 31, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
1,529,512
|
|
|
$
|
12.46
|
|
|
—
|
|
|
—
|
|
Name
|
|
Age
|
|
Position
|
|
Year Individual
Became an
Executive Officer
|
|
Howard M. Lorber
|
|
71
|
|
|
President and Chief Executive Officer
|
|
2001
|
Richard J. Lampen
|
|
66
|
|
|
Executive Vice President
|
|
1996
|
J. Bryant Kirkland III
|
|
54
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
2006
|
Marc N. Bell
|
|
59
|
|
|
Senior Vice President, General Counsel and Secretary
|
|
1998
|
Ronald J. Bernstein
|
|
66
|
|
|
President and Chief Executive Officer of Liggett
|
|
2000
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended December 31,
|
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
(dollars in thousands, except per share amounts)
|
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues (1)
|
$
|
1,903,711
|
|
|
$
|
1,870,262
|
|
|
$
|
1,807,476
|
|
|
$
|
1,690,949
|
|
|
$
|
1,657,197
|
|
|
Operating income (3)
|
$
|
231,135
|
|
|
$
|
224,049
|
|
|
$
|
235,648
|
|
|
$
|
234,505
|
|
|
$
|
205,936
|
|
|
Net income attributed to Vector Group Ltd.
|
$
|
100,974
|
|
|
$
|
58,105
|
|
|
$
|
84,572
|
|
|
$
|
71,127
|
|
|
$
|
59,198
|
|
|
Per basic common share: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.64
|
|
|
$
|
0.35
|
|
|
$
|
0.54
|
|
|
$
|
0.48
|
|
|
$
|
0.40
|
|
|
Per diluted common share: (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.63
|
|
|
$
|
0.35
|
|
|
$
|
0.54
|
|
|
$
|
0.48
|
|
|
$
|
0.40
|
|
|
Cash distributions declared per common share (2)
|
$
|
1.54
|
|
|
$
|
1.47
|
|
|
$
|
1.40
|
|
|
$
|
1.33
|
|
|
$
|
1.27
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current assets
|
$
|
681,614
|
|
|
$
|
872,221
|
|
|
$
|
613,709
|
|
|
$
|
705,463
|
|
|
$
|
583,739
|
|
|
Total assets
|
$
|
1,505,089
|
|
|
$
|
1,549,504
|
|
|
$
|
1,328,278
|
|
|
$
|
1,404,035
|
|
|
$
|
1,280,615
|
|
|
Current liabilities
|
$
|
461,133
|
|
|
$
|
484,920
|
|
|
$
|
204,639
|
|
|
$
|
196,148
|
|
|
$
|
216,292
|
|
|
Notes payable, embedded derivatives, long-term debt and other obligations, less current portion
|
$
|
1,397,216
|
|
|
$
|
1,411,486
|
|
|
$
|
1,270,657
|
|
|
$
|
1,245,275
|
|
|
$
|
1,000,150
|
|
|
Non-current employee benefits, deferred income taxes and other long-term liabilities (4)
|
$
|
331,756
|
|
|
$
|
200,464
|
|
|
$
|
184,742
|
|
|
$
|
215,884
|
|
|
$
|
186,334
|
|
|
Stockholders’ deficiency
|
$
|
(685,016
|
)
|
|
$
|
(547,366
|
)
|
|
$
|
(331,760
|
)
|
|
$
|
(253,272
|
)
|
|
$
|
(122,161
|
)
|
|
(1)
|
Revenues include federal excise taxes of $451,256, $469,836, $460,561, $425,980 and $439,647, respectively.
|
(2)
|
Per share computations include the impact of 5% stock dividends on September 27, 2019, September 27, 2018, September 28, 2017, September 29, 2016, and September 29, 2015.
|
(3)
|
Operating income includes $6,298, $2,721 and $4,364 of income from MSA Settlements for the years ended December 31, 2018, 2017, and 2015, respectively and $247 of expense from MSA Settlements for the year ended December 31, 2016; $990, $6,591, $20,000 and $20,072 of litigation judgment and settlement expense for the years ended December 31, 2019, 2017, 2016, and 2015, respectively; $1,784 of litigation judgment and settlement income for the year ended December 31, 2018 and $41 and $1,819 of restructuring charges for the years ended December 31, 2016, and 2015, respectively.
|
(4)
|
Total assets, current liabilities and non-current liabilities are not comparable across the periods because they reflect the impact of recognizing leases assets and lease liabilities on the balance sheet after we adopted ASU No. 2016-02 - Leases (Topic 842) on January 1, 2019.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Tobacco: the manufacture and sale of cigarettes in the United States through our Liggett Group LLC and Vector Tobacco Inc. subsidiaries, and
|
•
|
Real Estate: the real estate business through our New Valley subsidiary, which is seeking to acquire or invest in additional real estate properties or projects. As of December 31, 2018, New Valley owned a 100% interest in Douglas Elliman. Douglas Elliman operates the largest residential brokerage company in the New York metropolitan area and also conducts residential real estate brokerage operations in Florida, California, Connecticut, Massachusetts, Colorado, New Jersey, and Texas.
|
•
|
EAGLE 20’s
|
•
|
PYRAMID
|
•
|
GRAND PRIX
|
•
|
LIGGETT SELECT
|
•
|
EVE
|
•
|
USA and various Partner Brands and private label brands.
|
|
Year Ended December 31,
|
|
||||||||||||
|
2019
|
|
|
2018
|
|
|
2017
|
|
||||||
|
(Dollars in thousands)
|
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Tobacco
|
$
|
1,114,840
|
|
|
|
$
|
1,111,094
|
|
|
|
$
|
1,080,950
|
|
|
Real Estate
|
788,871
|
|
|
|
759,168
|
|
|
|
727,364
|
|
|
|||
Corporate and Other
|
—
|
|
|
|
—
|
|
|
|
(838
|
)
|
|
|||
Total revenues
|
$
|
1,903,711
|
|
|
|
$
|
1,870,262
|
|
|
|
$
|
1,807,476
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|||||
Tobacco
|
$
|
261,630
|
|
(1)
|
|
$
|
246,527
|
|
(2)
|
|
$
|
240,400
|
|
(4)
|
Real Estate
|
(2,930
|
)
|
|
|
3,435
|
|
(3)
|
|
21,439
|
|
|
|||
Corporate and Other
|
(27,565
|
)
|
|
|
(25,913
|
)
|
|
|
(26,191
|
)
|
|
|||
Total operating income
|
$
|
231,135
|
|
|
|
$
|
224,049
|
|
|
|
$
|
235,648
|
|
|
(1)
|
Operating income includes $990 of litigation settlement and judgment expense.
|
|
|
|
Year Ended December 31,
|
|
||||||
|
|
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
||||||
Manufacturing overhead, raw materials and labor
|
$
|
123,654
|
|
|
$
|
125,807
|
|
|
||
Federal excise taxes
|
|
451,256
|
|
|
469,836
|
|
|
|||
FDA expense
|
|
24,947
|
|
|
23,428
|
|
|
|||
MSA expense, net of market share exemption
|
|
165,471
|
|
|
162,522
|
|
(1)
|
|||
Customer shipping and handling
|
|
5,802
|
|
|
5,658
|
|
|
|||
|
Total cost of sales
|
|
$
|
771,130
|
|
|
$
|
787,251
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes $6,298 reduction in expense from MSA Settlement.
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Real Estate Revenues:
|
|
|
|
||||
Commission and other brokerage income
|
$
|
742,414
|
|
|
$
|
715,458
|
|
Property management income
|
35,461
|
|
|
33,350
|
|
||
Title fees
|
6,233
|
|
|
5,281
|
|
||
Sales on facilities primarily from Escena
|
4,763
|
|
|
5,079
|
|
||
Total real estate revenues
|
$
|
788,871
|
|
|
$
|
759,168
|
|
|
|
|
|
||||
Real Estate Cost of Sales:
|
|
|
|
||||
Real estate agent commissions
|
$
|
525,233
|
|
|
$
|
500,369
|
|
Cost of sales on facilities primarily from Escena
|
3,755
|
|
|
3,736
|
|
||
Title fees
|
1,461
|
|
|
1,128
|
|
||
Total real estate cost of sales
|
$
|
530,449
|
|
|
$
|
505,233
|
|
|
(Dollars in Thousands. Area and Unit Information in Ones)
|
||||||||||||||||||||||||||
|
Location
|
Date of Initial Investment
|
Percentage Owned (1)
|
Net Cash Invested
|
Cumulative Earnings (Losses)
|
Carrying Value as of 12/31/2019
|
Future Capital Commit-
ments from New Valley (2) |
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
|
%
|
$
|
18,345
|
|
$
|
—
|
|
$
|
18,345
|
|
$
|
—
|
|
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
|
%
|
2,317
|
|
7,655
|
|
$
|
9,972
|
|
—
|
|
450
|
|
Acres
|
|
|
667
450 |
|
R Lots
H |
N/A
|
N/A
|
||||
Investments in real estate, net
|
|
|
|
$
|
20,662
|
|
$
|
7,655
|
|
$
|
28,317
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
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
|
%
|
(5,355
|
)
|
5,355
|
|
—
|
|
—
|
|
90,000
|
|
SF
|
—
|
|
|
29
|
|
R
|
June 2012
|
Completed
|
||||
11 Beach Street
|
TriBeCa, Manhattan, NY
|
June 2012
|
49.5
|
%
|
4,790
|
|
6,250
|
|
11,040
|
|
—
|
|
97,000
|
|
SF
|
—
|
|
|
27
|
|
R
|
May 2014
|
Completed
|
||||
20 Times Square (701 Seventh Avenue)
|
Times Square, Manhattan, NY
|
August 2012
|
7.9
|
%
|
(7,827
|
)
|
7,827
|
|
—
|
|
—
|
|
252,000
|
|
SF
|
80,000
|
|
SF
|
452
|
|
H
|
September 2013
|
Completed
|
||||
111 Murray Street
|
TriBeCa, Manhattan, NY
|
May 2013
|
9.5
|
%
|
6,393
|
|
2,310
|
|
8,703
|
|
—
|
|
330,000
|
|
SF
|
1,700
|
|
SF
|
157
|
|
R
|
September 2014
|
Completed
|
||||
160 Leroy Street (3)
|
West Greenwich Village, Manhattan, NY
|
March 2013
|
3.1
|
%
|
(626
|
)
|
1,523
|
|
897
|
|
—
|
|
130,000
|
|
SF
|
—
|
|
|
57
|
|
R
|
Fall 2015
|
Completed
|
||||
The Dutch (25-19 43rd Avenue)
|
Long Island City, NY
|
May 2014
|
9.9
|
%
|
(1,108
|
)
|
1,385
|
|
277
|
|
|
65,000
|
|
SF
|
—
|
|
|
86
|
|
R
|
September 2014
|
Completed
|
|||||
87 Park (8701 Collins Avenue)
|
Miami Beach, FL
|
December 2013
|
15.0
|
%
|
18,352
|
|
3,218
|
|
21,570
|
|
—
|
|
160,000
|
|
SF
|
TBD
|
|
|
70
|
|
R
|
October 2015
|
Completed
|
||||
125 Greenwich Street (3)
|
Financial District, Manhattan, NY
|
August 2014
|
13.4
|
%
|
7,992
|
|
(7,992
|
)
|
—
|
|
—
|
|
306,000
|
|
SF
|
16,000
|
|
SF
|
273
|
|
R
|
March 2015
|
TBD
|
||||
West Hollywood Edition (9040 Sunset Boulevard)
|
West Hollywood, CA
|
October 2014
|
48.5
|
%
|
1,787
|
|
2,987
|
|
4,774
|
|
—
|
|
210,000
|
|
SF
|
—
|
|
|
20
190 |
|
R
H |
May 2015
|
Completed
|
||||
The XI (76 Eleventh Avenue)
|
West Chelsea, Manhattan, NY
|
May 2015
|
5.1
|
%
|
17,000
|
|
(17,000
|
)
|
—
|
|
—
|
|
630,000
|
|
SF
|
85,000
|
|
SF
|
236
137 |
|
R
H |
September 2016
|
December 2020
|
||||
Monad Terrace
|
Miami Beach, FL
|
May 2015
|
18.0
|
%
|
7,635
|
|
(5,089
|
)
|
2,546
|
|
—
|
|
160,000
|
|
SF
|
—
|
|
|
59
|
|
R
|
May 2016
|
June 2020
|
||||
Takanasee (805 Ocean Ave)
|
Long Branch, NJ
|
December 2015
|
22.8
|
%
|
6,144
|
|
(2,569
|
)
|
3,575
|
|
—
|
|
63,000
|
|
SF
|
—
|
|
|
13
|
|
R
|
June 2017
|
TBD
|
||||
Brookland (15 East 19th St)
|
Brooklyn, NY
|
April 2017
|
9.8
|
%
|
402
|
|
68
|
|
470
|
|
—
|
|
24,000
|
|
SF
|
—
|
|
|
33
|
|
R
|
August 2017
|
Completed
|
||||
Dime (209 Havemeyer St)
|
Brooklyn, NY
|
November 2017
|
19.8
|
%
|
8,650
|
|
2,068
|
|
10,718
|
|
—
|
|
100,000
|
|
SF
|
150,000
|
|
|
177
|
|
R
|
May 2017
|
May 2020
|
||||
352 6th Avenue
|
Brooklyn, NY
|
February 2019
|
37.0
|
%
|
500
|
|
40
|
|
540
|
|
—
|
|
5,200
|
|
SF
|
—
|
|
—
|
4
|
|
R
|
September 2019
|
September 2020
|
||||
Meatpacking Plaza
|
Meatpacking District, NY
|
April 2019
|
16.9
|
%
|
10,018
|
|
(494
|
)
|
9,524
|
|
—
|
|
TBD
|
|
—
|
TBD
|
|
—
|
TBD
|
|
—
|
TBD
|
TBD
|
||||
The Park on Fifth
|
Miami Beach, FL
|
September 2019
|
38.9
|
%
|
14,132
|
|
298
|
|
14,430
|
|
—
|
|
434,000
|
|
SF
|
15,000
|
|
SF
|
302
|
|
R
|
April 2020
|
August 2022
|
||||
9 DeKalb
|
Brooklyn, NY
|
April 2019
|
4.9
|
%
|
5,000
|
|
334
|
|
5,334
|
|
—
|
|
450,000
|
|
SF
|
120,000
|
|
SF
|
540
|
|
R
|
March 2019
|
March 2022
|
||||
West Hialeah
|
Miami, FL
|
December 2019
|
77.8
|
%
|
12,522
|
|
—
|
|
12,522
|
|
—
|
|
1,400,000
|
|
SF
|
—
|
|
|
1,369
|
|
R
|
December 2019
|
September 2023
|
||||
Condominium and Mixed Use Development
|
|
|
|
$
|
62,730
|
|
$
|
44,190
|
|
$
|
106,920
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
ST Portfolio
|
|
November 2013
|
16.3
|
%
|
$
|
(1,673
|
)
|
$
|
1,673
|
|
$
|
—
|
|
$
|
—
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
N/A
|
Maryland Portfolio
|
Primarily Baltimore County, MD
|
July 2012
|
7.6
|
%
|
698
|
|
(698
|
)
|
—
|
|
—
|
|
N/A
|
|
|
N/A
|
|
|
5,517
|
|
R
|
N/A
|
N/A
|
||||
Apartment Buildings
|
|
|
|
$
|
(975
|
)
|
$
|
975
|
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Park Lane Hotel (36 Central Park South)
|
Central Park South, Manhattan, NY
|
November 2013
|
1.0
|
%
|
$
|
8,682
|
|
$
|
(6,220
|
)
|
$
|
2,462
|
|
—
|
|
446,000
|
|
SF
|
—
|
|
|
628
|
|
H
|
N/A
|
N/A
|
|
215 Chrystie Street
|
Lower East Side, Manhattan, NY
|
December 2012
|
18.4
|
%
|
(4,551
|
)
|
4,551
|
|
—
|
|
—
|
|
246,000
|
|
SF
|
—
|
|
|
367
|
|
H
|
June 2014
|
Completed
|
||||
Coral Beach and Tennis Club
|
Coral Beach, Bermuda
|
December 2013
|
49.0
|
%
|
6,048
|
|
(3,887
|
)
|
2,161
|
|
—
|
|
52
|
|
Acres
|
—
|
|
|
101
|
|
H
|
N/A
|
N/A
|
||||
Hotels
|
|
|
|
$
|
10,179
|
|
$
|
(5,556
|
)
|
$
|
4,623
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
The Plaza at Harmon Meadow
|
Secaucus, NJ
|
March 2015
|
49.0
|
%
|
$
|
4,801
|
|
$
|
(2,949
|
)
|
$
|
1,852
|
|
$
|
—
|
|
—
|
|
—
|
219,000
|
|
SF
|
—
|
|
—
|
N/A
|
N /A
|
Wynn Las Vegas Retail
|
Las Vegas, NV
|
December 2016
|
1.6
|
%
|
4,850
|
|
2,784
|
|
7,634
|
|
—
|
|
—
|
|
—
|
160,000
|
|
SF
|
—
|
|
—
|
N/A
|
N/A
|
||||
Commercial
|
|
|
|
$
|
9,651
|
|
$
|
(165
|
)
|
$
|
9,486
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Witkoff GP Partners (4)
|
Multiple
|
March 2017
|
15.0
|
%
|
$
|
10,630
|
|
$
|
(1,020
|
)
|
$
|
9,610
|
|
$
|
5,364
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
N/A
|
1 QPS Tower (23-10 Queens Plaza South)
|
Long Island City, NY
|
December 2012
|
45.4
|
%
|
(14,406
|
)
|
14,406
|
|
—
|
|
—
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
March 2014
|
Completed
|
||||
Witkoff EB-5 Capital Partners
|
Multiple
|
September 2018
|
49.0
|
%
|
516
|
|
401
|
|
917
|
|
8,735
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
N/A
|
||||
Diverse Real Estate Portfolio
|
|
|
|
$
|
(3,260
|
)
|
$
|
13,787
|
|
$
|
10,527
|
|
$
|
14,099
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment in real estate ventures
|
|
|
|
$
|
78,325
|
|
$
|
53,231
|
|
$
|
131,556
|
|
$
|
14,099
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Carrying Value
|
|
|
|
$
|
98,987
|
|
$
|
60,886
|
|
$
|
159,873
|
|
$
|
14,099
|
|
|
|
|
|
|
|
|
|
||||
(1) The Percentage Owned reflects our estimated current ownership percentage. Our actual ownership percentage as well as the percentage of earnings and cash distributions may ultimately differ as a result of a number of factors including potential dilution, financing or admission of additional partners.
|
(2) 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.
|
|||||||||||||||||||||||||||
(3) Carrying value as of December 31, 2019, includes non-controlling interest of $448 and $0 respectively.
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(4) The Witkoff GP Partners venture includes a $2,019 investment in 500 Broadway and a $7,591 investment in Fontainebleau Las Vegas.
|
|||||||||||||||||||||||||||
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,
2019 |
||||
Consolidated EBITDA, as defined
|
|
$
|
75,000
|
|
|
$
|
338,697
|
|
Leverage ratio, as defined
|
|
<3.0 to 1
|
|
|
3.03 to 1
|
|
||
Secured leverage ratio, as defined
|
|
<1.5 to 1
|
|
|
0.96 to 1
|
|
Covenant
|
|
Indenture
Requirement |
|
December 31,
2019 |
|
Fixed charge coverage ratio, as defined
|
|
>2.0 to 1
|
|
2.63 to 1
|
|
Net leverage ratio, as defined
|
|
<4.0 to 1
|
|
3.08 to 1
|
|
Secured leverage ratio, as defined
|
|
<3.75 to 1
|
|
0.46 to 1
|
|
Contractual Obligations
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
Notes payable, long-term debt and other obligations (1)
|
|
$
|
214,947
|
|
|
$
|
10,026
|
|
|
$
|
10,045
|
|
|
$
|
29
|
|
|
$
|
8
|
|
|
$
|
1,405,000
|
|
|
$
|
1,640,055
|
|
Operating leases (2)
|
|
36,611
|
|
|
35,453
|
|
|
32,943
|
|
|
30,866
|
|
|
25,415
|
|
|
117,040
|
|
|
278,328
|
|
|||||||
Inventory purchase commitments (3)
|
|
20,693
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,693
|
|
|||||||
Capital expenditure purchase commitments (4)
|
|
276
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
276
|
|
|||||||
Interest payments (5)
|
|
118,313
|
|
|
110,839
|
|
|
110,532
|
|
|
110,340
|
|
|
110,338
|
|
|
142,581
|
|
|
702,943
|
|
|||||||
Engle progeny settlements
|
|
3,426
|
|
|
3,426
|
|
|
3,426
|
|
|
3,426
|
|
|
3,426
|
|
|
13,704
|
|
|
30,834
|
|
|||||||
Total (6)
|
|
$
|
394,266
|
|
|
$
|
159,744
|
|
|
$
|
156,946
|
|
|
$
|
144,661
|
|
|
$
|
139,187
|
|
|
$
|
1,678,325
|
|
|
$
|
2,673,129
|
|
(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 11 to our consolidated financial statements.
|
(2)
|
Operating lease obligations represent estimated lease payments for facilities and equipment. See Note 4 to our consolidated financial statements.
|
(3)
|
Inventory purchase commitments represent primarily purchase commitments under our leaf inventory management program. See Note 6 to our consolidated financial statements.
|
(4)
|
Capital expenditure purchase commitments represent purchase commitments for machinery and equipment at Liggett. See Note 7 to our consolidated financial statements.
|
(5)
|
Interest payments are based on current interest rates at December 31, 2019 and our current policy of a cash dividend of $0.20 per quarter, as the interest payable on the convertible notes due 2020 is calculated based on the dividends we pay on our common stock. For more information concerning our long-term debt, see “Liquidity and Capital Resources” above and Note 11 to our consolidated financial statements. Interest payments also include payments for interest related to finance leases.
|
(6)
|
Because their future cash outflows are uncertain, the above table excludes our pension and post benefit plans unfunded obligations of $68,618 at December 31, 2019.
|
•
|
economic outlook,
|
•
|
capital expenditures,
|
•
|
cost reduction,
|
•
|
competition,
|
•
|
legislation and regulations,
|
•
|
cash flows,
|
•
|
operating performance,
|
•
|
litigation, 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,
|
•
|
adverse changes in global, national, regional and local economic and market conditions, including those relating to pandemics and health crises, such as the recent outbreak of novel coronavirus (COVID-19),
|
•
|
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, e.g. 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 that did not join the MSA.
|
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
|
|
Indenture, dated as of November 20, 2012, by and between Vector Group Ltd. and Wells Fargo Bank, N. A., as trustee (incorporated by reference to Exhibit 4.1 of Vector’s Form 8-K dated November 20, 2012).
|
|
|
|
* 4.2
|
|
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).
|
|
|
|
* 4.3
|
|
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).
|
|
|
|
* 4.4
|
|
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).
|
|
|
|
* 4.5
|
|
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).
|
|
|
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
* 4.6
|
|
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).
|
|
|
|
* 4.7
|
|
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).
|
|
|
|
* 4.8
|
|
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).
|
|
|
|
* 4.9
|
|
Indenture, dated as of November 2, 2018, among Vector Group Ltd., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Vector’s Form 8-K dated November 2, 2018).
|
|
|
|
* 4.11
|
|
First Supplemental Indenture, dated as of November 18, 2019, among Vector Group Ltd., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 in Vector’s Form 8-K dated November 18, 2019).
|
|
|
|
|
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
|
|
|
|
|
* 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).
|
|
|
|
* 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).
|
|
|
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
* 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
|
|
Letter Agreement, dated as of February 18, 2020, by and among Ronald J. Bernstein, Liggett Vector Brands LLC, Vector Group Ltd. (incorporated by reference to Exhibit 10.1 in Vector’s Form 8-k dated February 18, 2020).
|
|
|
|
* 10.18
|
|
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).
|
|
|
|
* 10.19
|
|
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).
|
|
|
|
* 10.20
|
|
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).
|
|
|
|
* 10.21
|
|
Vector Group Ltd. Management Incentive Plan (incorporated by reference to Exhibit 10.3 of Vector’s Form 8-K dated March 10, 2014).
|
|
|
|
* 10.22
|
|
Form of 1999 Amended and Restated Incentive Plan Option Agreement to Named Executive Officers (incorporated by reference to Exhibit 10.21 of Vector’s Form 10-K dated December 31, 2017).
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
|
|
* 10.23
|
|
Form of 2014 Management Incentive Plan Option Award to Named Executive Officers (incorporated by reference to Exhibit 10.22 of Vector’s Form 10-K dated December 31, 2017).
|
|
|
|
* 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).
|
|
|
|
* 10.32
|
|
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).
|
|
|
|
* 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).
|
|
|
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
* 10.36
|
|
Third Amended and Restated Credit Agreement, dated as of January 14, 2015, among Liggett Group LLC, 100 Maple LLC, the lenders party thereto from time to time and Wells Fargo Bank, National Association, as administrative and collateral agent, as amended by Amendment No. 1 to Third Amended and Restated Credit Agreement, dated as of January 27, 2017, Amendment No. 2 to Third Amended and Restated Credit Agreement, dated as of October 30, 2018, and Amendment No. 3 to Third Amended and Restated Credit Agreement, dated as of October 31, 2019 (incorporated by reference to Exhibit 10.1 in Vector’s Form 8-K dated November 5, 2019).
|
|
|
|
|
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 2, 2020
|
|
|
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/ Paul V. Carlucci
|
|
Director
|
Paul V. Carlucci
|
|
|
|
|
|
/s/ Jean E. Sharpe
|
|
Director
|
Jean E. Sharpe
|
|
|
|
|
|
/s/ Barry Watkins
|
|
Director
|
Barry Watkins
|
|
|
|
Page
|
|
|
|
|
FINANCIAL STATEMENTS:
|
|
|
Vector Group Ltd. Consolidated Financial Statements
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
Consolidated Balance Sheets as of December 31, 2019 and 2018
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017
|
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017
|
|
|
Consolidated Statements of Stockholders' Deficiency for the years ended December 31, 2019, 2018 and 2017
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
|
|
Notes to Consolidated Financial Statements
|
|
|
FINANCIAL STATEMENT SCHEDULE:
|
|
|
Schedule II — Valuation and Qualifying Accounts
|
|
•
|
We tested the effectiveness of controls over management’s identification of possible circumstances that may indicate that the carrying amounts of real estate ventures may not be recoverable and controls over management’s evaluation of whether indicators of impairment existed used to determine fair value, including controls over management’s review of the real estate venture financial information and real estate market information for the real estate venture’s real estate holdings.
|
•
|
We evaluated the Company’s determination and recording of other-than-temporary impairments for real estate ventures by performing detailed procedures on selected real estate investments. These procedures included:
|
–
|
Evaluating whether indicators of impairment existed related to the Company’s real estate ventures in certain key markets.
|
–
|
Obtaining financial information of the real estate venture such as audited financial statements, if available, as well as obtaining real estate market information for the real estate ventures real estate holdings from our fair value specialists, as needed.
|
–
|
Performing site visits and inquiries of real estate venture managers, real estate venture accounting firms, and other valuation procedures.
|
•
|
We tested the effectiveness of controls relating to the determination of tobacco product liability contingencies.
|
•
|
We evaluated the provisions for tobacco litigation by:
|
–
|
Obtaining letters from the Company’s internal and external counsel which include schedules and analysis of all pending tobacco cases.
|
–
|
Meeting quarterly with the Company’s general counsel and obtaining updates on tobacco litigation activity.
|
–
|
Reviewing tobacco product liability activity of other public tobacco companies for which Liggett is often a codefendant.
|
–
|
Evaluating recorded provisions and disclosures based on the information obtained.
|
–
|
Utilizing the information obtained from the letters from the Company’s internal and external counsel, quarterly meetings with the Company’s general counsel, and tobacco product liability activity of other tobacco companies to assess management’s conclusion of the probability of the outcome for pending litigation.
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
|
(Dollars in thousands, except per share amounts)
|
||||||
ASSETS:
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
371,341
|
|
|
$
|
584,581
|
|
Investment securities at fair value
|
129,641
|
|
|
131,569
|
|
||
Accounts receivable - trade, net
|
36,959
|
|
|
34,246
|
|
||
Inventories
|
98,762
|
|
|
90,997
|
|
||
Other current assets
|
44,911
|
|
|
30,828
|
|
||
Total current assets
|
681,614
|
|
|
872,221
|
|
||
Property, plant and equipment, net
|
82,160
|
|
|
86,736
|
|
||
Investments in real estate, net
|
28,317
|
|
|
26,220
|
|
||
Long-term investments (of which $45,781 and $54,628 were carried at fair value)
|
61,723
|
|
|
66,259
|
|
||
Investments in real estate ventures
|
131,556
|
|
|
141,105
|
|
||
Operating lease right of use assets
|
149,578
|
|
|
—
|
|
||
Goodwill and other intangible assets, net
|
265,993
|
|
|
266,611
|
|
||
Other assets
|
104,148
|
|
|
90,352
|
|
||
Total assets
|
$
|
1,505,089
|
|
|
$
|
1,549,504
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of notes payable and long-term debt
|
$
|
209,269
|
|
|
$
|
256,134
|
|
Current portion of fair value of derivatives embedded within convertible debt
|
4,999
|
|
|
6,635
|
|
||
Current payments due under the Master Settlement Agreement
|
34,116
|
|
|
36,561
|
|
||
Current operating lease liability
|
18,294
|
|
|
—
|
|
||
Income taxes payable, net
|
5,138
|
|
|
5,252
|
|
||
Other current liabilities
|
189,317
|
|
|
180,338
|
|
||
Total current liabilities
|
461,133
|
|
|
484,920
|
|
||
Notes payable, long-term debt and other obligations, less current portion
|
1,397,216
|
|
|
1,386,697
|
|
||
Fair value of derivatives embedded within convertible debt
|
—
|
|
|
24,789
|
|
||
Non-current employee benefits
|
67,853
|
|
|
61,288
|
|
||
Deferred income taxes, net
|
33,695
|
|
|
37,411
|
|
||
Non-current operating lease liability
|
156,963
|
|
|
—
|
|
||
Payments due under the Master Settlement Agreement
|
17,275
|
|
|
16,383
|
|
||
Other liabilities
|
55,970
|
|
|
85,382
|
|
||
Total liabilities
|
2,190,105
|
|
|
2,096,870
|
|
||
Commitments and contingencies (Notes 4 and 15)
|
|
|
|
||||
Stockholders' deficiency:
|
|
|
|
||||
Preferred stock, par value $1 per share, 10,000,000 shares authorized
|
—
|
|
|
—
|
|
||
Common stock, par value $0.1 per share, 250,000,000 shares authorized, 148,084,900 and 140,914,642 shares issued and outstanding
|
14,808
|
|
|
14,092
|
|
||
Accumulated deficit
|
(678,464
|
)
|
|
(542,169
|
)
|
||
Accumulated other comprehensive loss
|
(21,808
|
)
|
|
(19,982
|
)
|
||
Total Vector Group Ltd. stockholders' deficiency
|
(685,464
|
)
|
|
(548,059
|
)
|
||
Non-controlling interest
|
448
|
|
|
693
|
|
||
Total stockholders' deficiency
|
(685,016
|
)
|
|
(547,366
|
)
|
||
Total liabilities and stockholders' deficiency
|
$
|
1,505,089
|
|
|
$
|
1,549,504
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands, except per share amounts)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Tobacco*
|
$
|
1,114,840
|
|
|
$
|
1,111,094
|
|
|
$
|
1,080,950
|
|
Real estate
|
788,871
|
|
|
759,168
|
|
|
727,364
|
|
|||
Corporate and other
|
—
|
|
|
—
|
|
|
(838
|
)
|
|||
Total revenues
|
1,903,711
|
|
|
1,870,262
|
|
|
1,807,476
|
|
|||
|
|
|
|
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
||||
Cost of sales:
|
|
|
|
|
|
||||||
Tobacco*
|
771,130
|
|
|
787,251
|
|
|
750,768
|
|
|||
Real estate
|
530,449
|
|
|
505,233
|
|
|
477,278
|
|
|||
Total cost of sales
|
1,301,579
|
|
|
1,292,484
|
|
|
1,228,046
|
|
|||
|
|
|
|
|
|
||||||
Operating, selling, administrative and general expenses
|
370,007
|
|
|
355,513
|
|
|
337,191
|
|
|||
Litigation settlement and judgment expense (income)
|
990
|
|
|
(1,784
|
)
|
|
6,591
|
|
|||
Operating income
|
231,135
|
|
|
224,049
|
|
|
235,648
|
|
|||
|
|
|
|
|
|
||||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
(138,448
|
)
|
|
(203,780
|
)
|
|
(173,685
|
)
|
|||
Loss on extinguishment of debt
|
(4,301
|
)
|
|
(4,066
|
)
|
|
(34,110
|
)
|
|||
Change in fair value of derivatives embedded within convertible debt
|
26,425
|
|
|
44,989
|
|
|
35,919
|
|
|||
Equity in (losses) earnings from real estate ventures
|
(19,288
|
)
|
|
14,446
|
|
|
21,395
|
|
|||
Other, net
|
38,305
|
|
|
3,921
|
|
|
4,001
|
|
|||
Income before provision for income taxes
|
133,828
|
|
|
79,559
|
|
|
89,168
|
|
|||
Income tax expense (benefit)
|
32,813
|
|
|
21,552
|
|
|
(1,582
|
)
|
|||
|
|
|
|
|
|
||||||
Net income
|
101,015
|
|
|
58,007
|
|
|
90,750
|
|
|||
|
|
|
|
|
|
||||||
Net (income) loss attributed to non-controlling interest
|
(41
|
)
|
|
98
|
|
|
(6,178
|
)
|
|||
|
|
|
|
|
|
||||||
Net income attributed to Vector Group Ltd.
|
$
|
100,974
|
|
|
$
|
58,105
|
|
|
$
|
84,572
|
|
|
|
|
|
|
|
||||||
Per basic common share:
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
||||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.64
|
|
|
$
|
0.35
|
|
|
$
|
0.54
|
|
|
|
|
|
|
|
||||||
Per diluted common share:
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.63
|
|
|
$
|
0.35
|
|
|
$
|
0.54
|
|
*
|
Revenues and cost of sales include federal excise taxes of $451,256, $469,836 and $460,561 for the years ended December 31, 2019, 2018 and 2017, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Net income
|
$
|
101,015
|
|
|
$
|
58,007
|
|
|
$
|
90,750
|
|
|
|
|
|
|
|
||||||
Net unrealized gains (losses) on investment securities available for sale:
|
|
|
|
|
|
||||||
Change in net unrealized gains (losses)
|
681
|
|
|
(1,056
|
)
|
|
(6,655
|
)
|
|||
Net unrealized (gains) losses reclassified into net income
|
(118
|
)
|
|
1,121
|
|
|
296
|
|
|||
Net unrealized gains (losses) on investment securities available for sale
|
563
|
|
|
65
|
|
|
(6,359
|
)
|
|||
|
|
|
|
|
|
||||||
Net change in forward contracts
|
—
|
|
|
—
|
|
|
2
|
|
|||
|
|
|
|
|
|
||||||
Net change in pension-related amounts
|
|
|
|
|
|
||||||
Amortization of prior service costs
|
(33
|
)
|
|
—
|
|
|
—
|
|
|||
Net gain (loss) arising during the year
|
1,454
|
|
|
(3,723
|
)
|
|
1,768
|
|
|||
Amortization of loss
|
1,961
|
|
|
1,763
|
|
|
1,955
|
|
|||
Net change in pension-related amounts
|
3,382
|
|
|
(1,960
|
)
|
|
3,723
|
|
|||
|
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
3,945
|
|
|
(1,895
|
)
|
|
(2,634
|
)
|
|||
|
|
|
|
|
|
||||||
Income tax effect on:
|
|
|
|
|
|
||||||
Change in net unrealized gains (losses) on investment securities
|
(187
|
)
|
|
290
|
|
|
2,707
|
|
|||
Net unrealized (gains) losses reclassified into net income on investment securities
|
32
|
|
|
(308
|
)
|
|
(120
|
)
|
|||
Pension-related amounts
|
(919
|
)
|
|
538
|
|
|
(1,279
|
)
|
|||
Income tax (provision) benefit on other comprehensive income (loss)
|
(1,074
|
)
|
|
520
|
|
|
1,308
|
|
|||
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax
|
2,871
|
|
|
(1,375
|
)
|
|
(1,326
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
103,886
|
|
|
56,632
|
|
|
89,424
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive (income) loss attributed to non-controlling interest
|
(41
|
)
|
|
98
|
|
|
(6,178
|
)
|
|||
Comprehensive income attributed to Vector Group Ltd.
|
$
|
103,845
|
|
|
$
|
56,730
|
|
|
$
|
83,246
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated Deficit
|
|
Accumulated Other
Comprehensive
Income (Loss)
|
|
Non-controlling Interest
|
|
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
Total
|
|||||||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||
Balance, January 1, 2017
|
127,739,481
|
|
|
$
|
12,774
|
|
|
$
|
—
|
|
|
$
|
(333,529
|
)
|
|
$
|
(11,245
|
)
|
|
$
|
78,728
|
|
|
$
|
(253,272
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
84,572
|
|
|
—
|
|
|
6,178
|
|
|
90,750
|
|
||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,326
|
)
|
|
—
|
|
|
(1,326
|
)
|
||||||
Distributions and dividends on common stock ($1.40 per share)
|
—
|
|
|
—
|
|
|
(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
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock
|
2,000,000
|
|
|
200
|
|
|
43,030
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,230
|
|
||||||
Cancellation of shares under share lending agreement
|
(1,618,602
|
)
|
|
(162
|
)
|
|
162
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
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
|
)
|
||||||
Impact of adoption of new accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
6,354
|
|
|
(6,036
|
)
|
|
(4,894
|
)
|
|
(4,576
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
58,105
|
|
|
—
|
|
|
(98
|
)
|
|
58,007
|
|
||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,375
|
)
|
|
—
|
|
|
(1,375
|
)
|
||||||
Distributions and dividends on common stock ($1.47 per share)
|
—
|
|
|
—
|
|
|
(6,311
|
)
|
|
(219,972
|
)
|
|
—
|
|
|
—
|
|
|
(226,283
|
)
|
||||||
Restricted stock grant
|
31,666
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Surrender of shares in connection with restricted stock vesting
|
(192,119
|
)
|
|
(19
|
)
|
|
(3,637
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,656
|
)
|
||||||
Effect of stock dividend
|
6,709,671
|
|
|
671
|
|
|
—
|
|
|
(671
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
9,951
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,951
|
|
||||||
Acquisition of Douglas Elliman Realty, LLC
|
—
|
|
|
—
|
|
|
—
|
|
|
28,800
|
|
|
—
|
|
|
(73,953
|
)
|
|
(45,153
|
)
|
||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,521
|
)
|
|
(2,521
|
)
|
||||||
Balance, December 31, 2018
|
140,914,642
|
|
|
14,092
|
|
|
—
|
|
|
(542,169
|
)
|
|
(19,982
|
)
|
|
693
|
|
|
(547,366
|
)
|
||||||
Impact of adoption of new accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
3,147
|
|
|
(4,697
|
)
|
|
—
|
|
|
(1,550
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
100,974
|
|
|
—
|
|
|
41
|
|
|
101,015
|
|
||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,871
|
|
|
—
|
|
|
2,871
|
|
||||||
Distributions and dividends on common stock ($1.54 per share)
|
—
|
|
|
—
|
|
|
(4,041
|
)
|
|
(233,298
|
)
|
|
—
|
|
|
—
|
|
|
(237,339
|
)
|
||||||
Restricted stock grant
|
60,000
|
|
|
6
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Surrender of shares in connection with restricted stock vesting
|
(221,668
|
)
|
|
(22
|
)
|
|
(2,152
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,174
|
)
|
||||||
Surrender of shares in connection with stock option exercise
|
(1,529,512
|
)
|
|
(153
|
)
|
|
(18,905
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,058
|
)
|
||||||
Effect of stock dividend
|
7,037,087
|
|
|
703
|
|
|
—
|
|
|
(703
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Exercise of stock options
|
1,824,351
|
|
|
182
|
|
|
15,635
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,817
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
9,469
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,469
|
|
||||||
Basis adjustment on non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,415
|
)
|
|
—
|
|
|
—
|
|
|
(6,415
|
)
|
||||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(286
|
)
|
|
(286
|
)
|
||||||
Balance, December 31, 2019
|
148,084,900
|
|
|
$
|
14,808
|
|
|
$
|
—
|
|
|
$
|
(678,464
|
)
|
|
$
|
(21,808
|
)
|
|
$
|
448
|
|
|
$
|
(685,016
|
)
|
VECTOR GROUP LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)
|
|||||||||||
|
|
|
|
|
|
||||||
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Sale of investment securities
|
$
|
21,879
|
|
|
$
|
18,628
|
|
|
$
|
28,761
|
|
Maturities of investment securities
|
68,859
|
|
|
24,719
|
|
|
101,097
|
|
|||
Purchase of investment securities
|
(87,766
|
)
|
|
(34,445
|
)
|
|
(132,654
|
)
|
|||
Proceeds from sale or liquidation of long-term investments
|
8,256
|
|
|
19,487
|
|
|
966
|
|
|||
Purchase of long-term investments
|
(9,223
|
)
|
|
(415
|
)
|
|
(32,510
|
)
|
|||
Decrease in restricted assets
|
994
|
|
|
526
|
|
|
2,250
|
|
|||
Investments in real estate ventures
|
(52,529
|
)
|
|
(9,728
|
)
|
|
(38,807
|
)
|
|||
Distributions from investments in real estate ventures
|
41,300
|
|
|
54,233
|
|
|
61,718
|
|
|||
Issuance of notes receivable
|
—
|
|
|
(450
|
)
|
|
(1,633
|
)
|
|||
Cash acquired in purchase of subsidiaries
|
—
|
|
|
654
|
|
|
—
|
|
|||
Proceeds from sale of fixed assets
|
17
|
|
|
9
|
|
|
76
|
|
|||
Capital expenditures
|
(12,575
|
)
|
|
(17,682
|
)
|
|
(19,869
|
)
|
|||
Increase in cash surrender value of life insurance policies
|
(719
|
)
|
|
(764
|
)
|
|
(802
|
)
|
|||
Purchase of subsidiaries
|
(380
|
)
|
|
(10,404
|
)
|
|
(6,569
|
)
|
|||
Repayments of notes receivable
|
—
|
|
|
67
|
|
|
—
|
|
|||
Pay downs of investment securities
|
1,083
|
|
|
1,611
|
|
|
2,633
|
|
|||
Investments in real estate, net
|
(2,295
|
)
|
|
(2,583
|
)
|
|
(619
|
)
|
|||
Net cash (used in) provided by investing activities
|
(23,099
|
)
|
|
43,463
|
|
|
(35,962
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from issuance of debt
|
230,000
|
|
|
325,000
|
|
|
850,021
|
|
|||
Repayments of debt
|
(293,419
|
)
|
|
(28,689
|
)
|
|
(837,205
|
)
|
|||
Deferred financing costs
|
(9,802
|
)
|
|
(9,400
|
)
|
|
(19,200
|
)
|
|||
Borrowings under revolver
|
243,688
|
|
|
307,023
|
|
|
157,630
|
|
|||
Repayments on revolver
|
(239,526
|
)
|
|
(310,551
|
)
|
|
(163,474
|
)
|
|||
Dividends and distributions on common stock
|
(238,249
|
)
|
|
(225,367
|
)
|
|
(211,488
|
)
|
|||
Distributions to non-controlling interest
|
(286
|
)
|
|
(2,521
|
)
|
|
(2,779
|
)
|
|||
Proceeds from the issuance of Vector stock
|
—
|
|
|
—
|
|
|
43,230
|
|
|||
Tax withholdings related to net share settlements of stock option exercise
|
(5,415
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(216
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
(313,225
|
)
|
|
55,495
|
|
|
(183,265
|
)
|
|||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(212,253
|
)
|
|
280,792
|
|
|
(87,641
|
)
|
|||
Cash, cash equivalents and restricted cash, beginning of year
|
591,729
|
|
|
310,937
|
|
|
398,578
|
|
|||
Cash and cash equivalents and restricted cash, end of year
|
$
|
379,476
|
|
|
$
|
591,729
|
|
|
$
|
310,937
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
December 31,
2019 |
|
December 31,
2018 |
|
December 31,
2017 |
||||||
Cash and cash equivalents
|
$
|
371,341
|
|
|
$
|
584,581
|
|
|
$
|
301,353
|
|
Restricted cash and cash equivalents included in other current assets
|
4,423
|
|
|
2,697
|
|
|
9,081
|
|
|||
Restricted cash and cash equivalents included in other assets
|
3,712
|
|
|
4,451
|
|
|
503
|
|
|||
Total cash, cash equivalents, and restricted cash shown in the consolidated statement of cash flows
|
$
|
379,476
|
|
|
$
|
591,729
|
|
|
$
|
310,937
|
|
|
December 31,
2019 |
|
December 31,
2018 |
|
December 31,
2017 |
||||||
Net unrealized gains on investment securities available for sale, net of income taxes of $200, $60, and $3,687, respectively
|
$
|
530
|
|
|
$
|
108
|
|
|
$
|
6,097
|
|
Pension-related amounts, net of income taxes of $8,120, $13,750, and $13,212, respectively
|
(22,338
|
)
|
|
(20,090
|
)
|
|
(18,668
|
)
|
|||
Accumulated other comprehensive loss
|
$
|
(21,808
|
)
|
|
$
|
(19,982
|
)
|
|
$
|
(12,571
|
)
|
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Interest and dividend income
|
$
|
12,590
|
|
|
$
|
11,349
|
|
|
$
|
7,391
|
|
Equity in earnings (losses) from investments
|
17,000
|
|
|
3,158
|
|
|
(765
|
)
|
|||
Net gains (losses) recognized on investment securities
|
7,440
|
|
|
(9,570
|
)
|
|
(296
|
)
|
|||
Net periodic benefit cost other than the service costs
|
(2,298
|
)
|
|
(1,020
|
)
|
|
(1,960
|
)
|
|||
Other income (expense)
|
3,573
|
|
|
4
|
|
|
(369
|
)
|
|||
Other, net
|
$
|
38,305
|
|
|
$
|
3,921
|
|
|
$
|
4,001
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Accounts payable
|
$
|
10,222
|
|
|
$
|
13,144
|
|
Accrued promotional expenses
|
35,900
|
|
|
37,940
|
|
||
Accrued excise and payroll taxes payable, net
|
18,653
|
|
|
14,612
|
|
||
Accrued interest
|
35,756
|
|
|
38,673
|
|
||
Commissions payable
|
18,378
|
|
|
12,975
|
|
||
Accrued salaries and benefits
|
29,464
|
|
|
30,228
|
|
||
Allowance for sales returns
|
7,785
|
|
|
6,935
|
|
||
Other current liabilities
|
33,159
|
|
|
25,831
|
|
||
Total other current liabilities
|
$
|
189,317
|
|
|
$
|
180,338
|
|
|
|
Year Ended
|
||||||||||
|
|
December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Tobacco Segment Revenues:
|
|
|
|
|
|
|
||||||
Core Discount Brands - EAGLE 20’s, PYRAMID, GRAND PRIX, LIGGETT SELECT and EVE
|
|
$
|
1,008,050
|
|
|
$
|
1,005,071
|
|
|
$
|
969,796
|
|
Other Brands
|
|
106,790
|
|
|
106,023
|
|
|
111,154
|
|
|||
Total tobacco revenues
|
|
$
|
1,114,840
|
|
|
$
|
1,111,094
|
|
|
$
|
1,080,950
|
|
|
Year Ended December 31, 2019
|
||||||||||||||||||
|
Total
|
|
New York City
|
|
Northeast
|
|
Southeast
|
|
West
|
||||||||||
Real Estate Segment Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commission brokerage income
|
$
|
669,489
|
|
|
$
|
293,009
|
|
|
$
|
164,724
|
|
|
$
|
106,587
|
|
|
$
|
105,169
|
|
Development marketing
|
72,925
|
|
|
48,850
|
|
|
—
|
|
|
19,594
|
|
|
4,481
|
|
|||||
Property management revenue
|
35,461
|
|
|
34,741
|
|
|
720
|
|
|
—
|
|
|
—
|
|
|||||
Title fees
|
6,233
|
|
|
—
|
|
|
6,233
|
|
|
—
|
|
|
—
|
|
|||||
Total Douglas Elliman revenue
|
784,108
|
|
|
376,600
|
|
|
171,677
|
|
|
126,181
|
|
|
109,650
|
|
|||||
Other real estate revenues
|
4,763
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,763
|
|
|||||
Total real estate revenues
|
$
|
788,871
|
|
|
$
|
376,600
|
|
|
$
|
171,677
|
|
|
$
|
126,181
|
|
|
$
|
114,413
|
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Total
|
|
New York City
|
|
Northeast
|
|
Southeast
|
|
West
|
||||||||||
Real Estate Segment Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commission brokerage income
|
$
|
651,171
|
|
|
$
|
285,325
|
|
|
$
|
166,100
|
|
|
$
|
99,720
|
|
|
$
|
100,026
|
|
Development marketing
|
64,287
|
|
|
48,072
|
|
|
252
|
|
|
15,068
|
|
|
895
|
|
|||||
Property management revenue
|
33,350
|
|
|
32,635
|
|
|
715
|
|
|
—
|
|
|
—
|
|
|||||
Title fees
|
5,281
|
|
|
—
|
|
|
5,281
|
|
|
—
|
|
|
—
|
|
|||||
Total Douglas Elliman revenue
|
754,089
|
|
|
366,032
|
|
|
172,348
|
|
|
114,788
|
|
|
100,921
|
|
|||||
Other real estate revenues
|
5,079
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,079
|
|
|||||
Total real estate revenues
|
$
|
759,168
|
|
|
$
|
366,032
|
|
|
$
|
172,348
|
|
|
$
|
114,788
|
|
|
$
|
106,000
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Total
|
|
New York City
|
|
Northeast
|
|
Southeast
|
|
West
|
||||||||||
Real Estate Segment Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commission brokerage income
|
$
|
633,093
|
|
|
$
|
332,319
|
|
|
$
|
168,834
|
|
|
$
|
79,547
|
|
|
$
|
52,393
|
|
Development marketing
|
52,061
|
|
|
37,761
|
|
|
402
|
|
|
11,211
|
|
|
2,687
|
|
|||||
Property management revenue
|
31,924
|
|
|
31,224
|
|
|
700
|
|
|
—
|
|
|
—
|
|
|||||
Title fees
|
5,265
|
|
|
—
|
|
|
5,265
|
|
|
—
|
|
|
—
|
|
|||||
Total Douglas Elliman revenue
|
722,343
|
|
|
401,304
|
|
|
175,201
|
|
|
90,758
|
|
|
55,080
|
|
|||||
Other real estate revenues
|
5,021
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,021
|
|
|||||
Total real estate revenues
|
$
|
727,364
|
|
|
$
|
401,304
|
|
|
$
|
175,201
|
|
|
$
|
90,758
|
|
|
$
|
60,101
|
|
|
|
|
|
||||
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
||||
Receivables, which are included in accounts receivable - trade, net
|
$
|
2,129
|
|
|
$
|
2,050
|
|
Contract assets, net, which are included in other current assets
|
8,766
|
|
|
9,264
|
|
||
Payables, which are included in other current liabilities
|
1,663
|
|
|
1,082
|
|
||
Contract liabilities, which are included in other current liabilities
|
9,358
|
|
|
7,071
|
|
||
Contract assets, net, which are included in other assets
|
18,443
|
|
|
15,794
|
|
||
Contract liabilities, which are included in other liabilities
|
29,045
|
|
|
30,445
|
|
||
|
|
|
|
3.
|
EARNINGS PER SHARE
|
|
For the year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income attributed to Vector Group Ltd.
|
$
|
100,974
|
|
|
$
|
58,105
|
|
|
$
|
84,572
|
|
Income attributable to participating securities
|
(7,464
|
)
|
|
(7,016
|
)
|
|
(6,071
|
)
|
|||
Net income available to common stockholders attributed to Vector Group Ltd.
|
$
|
93,510
|
|
|
$
|
51,089
|
|
|
$
|
78,501
|
|
|
For the year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income attributed to Vector Group Ltd.
|
$
|
100,974
|
|
|
$
|
58,105
|
|
|
$
|
84,572
|
|
Income attributable to 7.5% Variable Interest Senior Convertible Notes
|
(1,255
|
)
|
|
—
|
|
|
—
|
|
|||
Income attributable to participating securities
|
(7,464
|
)
|
|
(7,016
|
)
|
|
(6,071
|
)
|
|||
Net income available to common stockholders attributed to Vector Group Ltd.
|
$
|
92,255
|
|
|
$
|
51,089
|
|
|
$
|
78,501
|
|
|
For the year ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Weighted-average shares for basic EPS
|
146,633,036
|
|
|
146,362,270
|
|
|
145,987,002
|
|
Plus incremental shares related to convertible debt
|
718,918
|
|
|
—
|
|
|
—
|
|
Plus incremental shares related to stock options and non-vested restricted stock
|
16,509
|
|
|
122,542
|
|
|
284,817
|
|
Weighted-average shares for diluted EPS
|
147,368,463
|
|
|
146,484,812
|
|
|
146,271,819
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Weighted-average shares of non-vested restricted stock
|
1,207,366
|
|
|
—
|
|
|
—
|
|
|||
Weighted-average expense per share
|
$
|
17.97
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Weighted-average number of shares issuable upon conversion of debt
|
11,118,139
|
|
|
30,212,414
|
|
|
30,260,607
|
|
|||
Weighted-average conversion price
|
$
|
20.27
|
|
|
$
|
16.14
|
|
|
$
|
16.15
|
|
4.
|
LEASES
|
|
|
Year Ended
|
||
|
|
December 31,
|
||
|
|
2019
|
||
Operating lease cost
|
|
$
|
37,817
|
|
Short-term lease cost
|
|
1,379
|
|
|
Variable lease cost
|
|
3,149
|
|
|
|
|
|
||
Finance lease cost:
|
|
|
||
Amortization
|
|
224
|
|
|
Interest on lease liabilities
|
|
15
|
|
|
Total lease cost
|
|
$
|
42,584
|
|
|
Year Ended
|
||
|
December 31,
|
||
|
2019
|
||
Cash paid for amounts included in measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
37,684
|
|
Operating cash flows from finance leases
|
15
|
|
|
Financing cash flows from finance leases
|
217
|
|
|
|
|
||
Right-of-use assets obtained in exchange for lease obligations:
|
|
||
Operating leases
|
41,776
|
|
|
Finance leases
|
159
|
|
|
December 31,
|
|
||
|
2019
|
|
||
Operating leases:
|
|
|
||
Operating lease right-of-use assets
|
$
|
149,578
|
|
|
|
|
|
||
Current operating lease liability
|
$
|
18,294
|
|
|
Non-current operating lease liability
|
156,963
|
|
|
|
Total operating lease liabilities
|
$
|
175,257
|
|
|
|
|
|
||
Finance leases:
|
|
|
||
Investments in real estate, net
|
$
|
88
|
|
(1)
|
|
|
|
||
Property, plant and equipment, at cost
|
$
|
127
|
|
|
Accumulated amortization
|
(19
|
)
|
|
|
Property and equipment, net
|
$
|
108
|
|
|
|
|
|
||
Current portion of notes payable and long-term debt
|
$
|
86
|
|
|
Notes payable, long-term debt and other obligations, less current portion
|
108
|
|
|
|
Total finance lease liabilities
|
$
|
194
|
|
|
|
|
|
||
Weighted average remaining lease term in years:
|
|
|
||
Operating leases
|
8.46
|
|
|
|
Finance leases
|
3.01
|
|
|
|
|
|
|
||
Weighted average discount rate:
|
|
|
||
Operating leases
|
10.75
|
%
|
|
|
Finance leases
|
8.61
|
%
|
|
(1)
|
Included in Investments in real estate, net on the consolidated balance sheet are finance lease equipment, at a cost of $762 and accumulated amortization of $674 as of December 31, 2019.
|
|
Operating Leases
|
|
Finance
Leases
|
||||
Year Ending December 31:
|
|
|
|
|
|
||
2020
|
$
|
36,611
|
|
|
$
|
98
|
|
2021
|
35,453
|
|
|
44
|
|
||
2022
|
32,943
|
|
|
39
|
|
||
2023
|
30,866
|
|
|
31
|
|
||
2024
|
25,415
|
|
|
8
|
|
||
Thereafter
|
117,040
|
|
|
—
|
|
||
Total lease payments
|
278,328
|
|
|
220
|
|
||
Less imputed interest
|
(103,071
|
)
|
|
(26
|
)
|
||
Total
|
$
|
175,257
|
|
|
$
|
194
|
|
|
Lease
Commitments
|
|
Sublease
Rentals
|
|
Net
|
||||||
Year Ending December 31:
|
|
|
|
|
|
|
|
|
|||
2020
|
$
|
35,973
|
|
|
$
|
69
|
|
|
$
|
35,904
|
|
2021
|
29,917
|
|
|
—
|
|
|
29,917
|
|
|||
2022
|
27,592
|
|
|
—
|
|
|
27,592
|
|
|||
2023
|
25,185
|
|
|
—
|
|
|
25,185
|
|
|||
2024
|
23,589
|
|
|
—
|
|
|
23,589
|
|
|||
Thereafter
|
104,126
|
|
|
—
|
|
|
104,126
|
|
|||
Total
|
$
|
246,382
|
|
|
$
|
69
|
|
|
$
|
246,313
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Debt securities available for sale
|
$
|
83,445
|
|
|
$
|
84,367
|
|
Equity securities at fair value
|
46,196
|
|
|
47,202
|
|
||
Total investment securities at fair value
|
$
|
129,641
|
|
|
$
|
131,569
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net gains (losses) recognized on equity securities at fair value (1)
|
$
|
7,320
|
|
|
$
|
(8,449
|
)
|
|
$
|
—
|
|
Net gains (losses) recognized on debt and equity securities available for sale (2)
|
135
|
|
|
(34
|
)
|
|
169
|
|
|||
Gross realized losses on other-than-temporary impairments (3)
|
(15
|
)
|
|
(1,087
|
)
|
|
(465
|
)
|
|||
Net gains (losses) recognized on investment securities
|
$
|
7,440
|
|
|
$
|
(9,570
|
)
|
|
$
|
(296
|
)
|
(1)
|
Includes net gains (losses) recognized on equity securities at fair value and net gains (losses) recognized on equity securities at fair value that qualify for the NAV practical expedient. The latter securities are included in the “Long-term investments” line item on the consolidated balance sheet and are further discussed in Note 8.
|
(2)
|
Includes net gains recognized on equity securities that were classified as available for sale in 2017.
|
(3)
|
Includes impairments on equity securities that were classified as equity securities available for sale in 2017.
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Marketable debt securities
|
$
|
82,714
|
|
|
$
|
731
|
|
|
$
|
—
|
|
|
$
|
83,445
|
|
Investment Type:
|
Fair Value
|
|
Under 1 Year
|
|
1 Year up to 5 Years
|
|
More than 5 Years
|
||||||||
U.S. Government securities
|
$
|
14,660
|
|
|
$
|
4,914
|
|
|
$
|
9,746
|
|
|
$
|
—
|
|
Corporate securities
|
54,413
|
|
|
25,824
|
|
|
28,589
|
|
|
—
|
|
||||
U.S. mortgage-backed securities
|
6,816
|
|
|
3,337
|
|
|
3,479
|
|
|
—
|
|
||||
Commercial mortgage-backed securities
|
382
|
|
|
382
|
|
|
—
|
|
|
—
|
|
||||
Commercial paper
|
5,887
|
|
|
5,887
|
|
|
—
|
|
|
—
|
|
||||
Index-linked U.S. bonds
|
779
|
|
|
779
|
|
|
—
|
|
|
—
|
|
||||
Foreign fixed-income securities
|
508
|
|
|
—
|
|
|
508
|
|
|
—
|
|
||||
Total debt securities available for sale by maturity dates
|
$
|
83,445
|
|
|
$
|
41,123
|
|
|
$
|
42,322
|
|
|
$
|
—
|
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
Marketable debt securities
|
$
|
84,199
|
|
|
$
|
168
|
|
|
$
|
—
|
|
|
$
|
84,367
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Gross realized gains on sales
|
|
$
|
144
|
|
|
$
|
4
|
|
|
$
|
479
|
|
Gross realized losses on sales
|
|
(9
|
)
|
|
(38
|
)
|
|
(310
|
)
|
|||
Net gains (losses) recognized on debt and equity securities available for sale
|
|
$
|
135
|
|
|
$
|
(34
|
)
|
|
$
|
169
|
|
|
|
|
|
|
|
|
||||||
Gross realized losses on other-than-temporary impairments
|
|
$
|
(15
|
)
|
|
$
|
(1,087
|
)
|
|
$
|
(465
|
)
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Marketable equity securities
|
$
|
23,819
|
|
|
$
|
26,010
|
|
Mutual funds invested in fixed-income securities
|
22,377
|
|
|
21,192
|
|
||
Total equity securities at fair value
|
$
|
46,196
|
|
|
$
|
47,202
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Net gains (losses) recognized on equity securities (1)
|
$
|
7,320
|
|
|
$
|
(8,449
|
)
|
Less: Net gains (losses) recognized on equity securities sold (2)
|
1,526
|
|
|
(808
|
)
|
||
Net unrealized gains (losses) recognized on equity securities still held at the reporting date
|
$
|
5,794
|
|
|
$
|
(7,641
|
)
|
|
|
|
|
(1)
|
Includes $6,619 of net gains and $517 of net losses recognized on equity securities at fair value that qualify for the NAV practical expedient for the years ended December 31, 2019 and 2018, respectively. These equity securities are included in the “Long-term investments” line item on the consolidated balance sheet and are further discussed in Note 8.
|
(2)
|
Includes $1,797 and $84 of net gains recognized on sales of equity securities at fair value that qualify for the NAV practical expedient for the years ended December 31, 2019 and 2018, respectively. These equity securities are included in the “Long-term investments” line item on the consolidated balance sheet and are further discussed in Note 8.
|
6.
|
INVENTORIES
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Leaf tobacco
|
$
|
44,516
|
|
|
$
|
42,917
|
|
Other raw materials
|
4,669
|
|
|
3,750
|
|
||
Work-in-process
|
333
|
|
|
1,931
|
|
||
Finished goods
|
71,183
|
|
|
63,937
|
|
||
Inventories at current cost
|
120,701
|
|
|
112,535
|
|
||
LIFO adjustments
|
(21,939
|
)
|
|
(21,538
|
)
|
||
|
$
|
98,762
|
|
|
$
|
90,997
|
|
7.
|
PROPERTY, PLANT AND EQUIPMENT
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Land and improvements
|
$
|
1,624
|
|
|
$
|
1,624
|
|
Buildings
|
17,733
|
|
|
16,919
|
|
||
Machinery and equipment
|
202,667
|
|
|
198,649
|
|
||
Leasehold improvements
|
52,652
|
|
|
51,322
|
|
||
|
274,676
|
|
|
268,514
|
|
||
Less accumulated depreciation and amortization
|
(192,516
|
)
|
|
(181,778
|
)
|
||
|
$
|
82,160
|
|
|
$
|
86,736
|
|
8.
|
LONG-TERM INVESTMENTS
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Equity securities at fair value that qualify for the NAV practical expedient
|
$
|
45,781
|
|
|
$
|
54,628
|
|
Equity-method investments
|
15,942
|
|
|
11,631
|
|
||
|
$
|
61,723
|
|
|
$
|
66,259
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Indian Creek Investors LP (“Indian Creek”)
|
$
|
735
|
|
|
$
|
1,167
|
|
Boyar Value Fund (“Boyar”)
|
9,989
|
|
|
8,384
|
|
||
Optika Fund LLC (“Optika”)
|
4,785
|
|
|
—
|
|
||
Ladenburg Thalmann Financial Services Inc. (“LTS”)
|
433
|
|
|
2,080
|
|
||
Castle Brands, Inc. (“Castle”)
|
—
|
|
|
—
|
|
||
|
$
|
15,942
|
|
|
$
|
11,631
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Investment securities
|
$
|
210,685
|
|
|
$
|
33,830
|
|
Cash and cash equivalents
|
26,088
|
|
|
521
|
|
||
Other assets
|
1,861
|
|
|
33
|
|
||
Total assets
|
$
|
238,634
|
|
|
$
|
34,384
|
|
|
|
|
|
||||
Other liabilities
|
$
|
85,623
|
|
|
$
|
738
|
|
Total liabilities
|
85,623
|
|
|
738
|
|
||
Partners’ capital
|
153,011
|
|
|
33,646
|
|
||
Total liabilities and partners’ capital
|
$
|
238,634
|
|
|
$
|
34,384
|
|
|
Year Ended
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Investment income
|
$
|
2,834
|
|
|
$
|
549
|
|
|
$
|
792
|
|
Expenses
|
6,756
|
|
|
861
|
|
|
690
|
|
|||
Net investment (loss) gain
|
(3,922
|
)
|
|
(312
|
)
|
|
102
|
|
|||
Total net realized gain (loss) and net change in unrealized depreciation from investments
|
18,822
|
|
|
(5,781
|
)
|
|
100
|
|
|||
Net increase (decrease) in partners’ capital resulting from operations
|
$
|
14,900
|
|
|
$
|
(6,093
|
)
|
|
$
|
202
|
|
|
September 30,
2019 |
|
September 30,
2018 |
||||
Cash and cash equivalents
|
$
|
251,033
|
|
|
$
|
262,834
|
|
Receivables from clearing brokers, note receivable and other receivable, net
|
175,600
|
|
|
165,149
|
|
||
Goodwill and intangible assets, net
|
188,975
|
|
|
200,199
|
|
||
Other assets
|
202,516
|
|
|
172,409
|
|
||
Total assets
|
$
|
818,124
|
|
|
$
|
800,591
|
|
|
|
|
|
||||
Accrued compensation, commissions and fees payable
|
$
|
142,875
|
|
|
$
|
141,260
|
|
Accounts payable and accrued liabilities
|
37,197
|
|
|
50,122
|
|
||
Notes payable, net of $5,881 and $115 unamortized discount in 2019 and 2018, respectively
|
315,898
|
|
|
185,199
|
|
||
Other liabilities
|
73,380
|
|
|
37,658
|
|
||
Total liabilities
|
569,350
|
|
|
414,239
|
|
||
Preferred stock
|
2
|
|
|
2
|
|
||
Common stock
|
15
|
|
|
20
|
|
||
Additional paid-in capital
|
317,735
|
|
|
487,752
|
|
||
Accumulated deficit
|
(68,971
|
)
|
|
(101,467
|
)
|
||
Total controlling shareholders’ equity
|
248,781
|
|
|
386,307
|
|
||
Non-controlling interest
|
(7
|
)
|
|
45
|
|
||
Total shareholders’ equity
|
248,774
|
|
|
386,352
|
|
||
Total liabilities and shareholders’ equity
|
$
|
818,124
|
|
|
$
|
800,591
|
|
|
Twelve Months Ended
September 30,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
$
|
1,428,688
|
|
|
$
|
1,380,031
|
|
|
$
|
1,221,195
|
|
Expenses
|
1,385,699
|
|
|
1,345,768
|
|
|
1,217,331
|
|
|||
Income before other items
|
42,989
|
|
|
34,263
|
|
|
3,864
|
|
|||
Change in fair value of contingent consideration
|
(363
|
)
|
|
(232
|
)
|
|
48
|
|
|||
Income from continuing operations
|
42,626
|
|
|
34,031
|
|
|
3,912
|
|
|||
Net income
|
$
|
31,779
|
|
|
$
|
30,858
|
|
|
$
|
1,669
|
|
|
Range of Ownership (1)
|
December 31, 2019
|
|
December 31, 2018
|
|
||||
Condominium and Mixed Use Development:
|
|
|
|
|
|
||||
New York City SMSA
|
3.1% - 49.5%
|
$
|
51,078
|
|
|
$
|
65,007
|
|
(2)
|
All other U.S. areas
|
15.0% - 77.8%
|
55,842
|
|
|
31,392
|
|
|
||
|
|
106,920
|
|
|
96,399
|
|
|
||
Apartment Buildings:
|
|
|
|
|
|
||||
New York City SMSA
|
45.4%
|
—
|
|
|
—
|
|
(3)
|
||
All other U.S. areas
|
7.6% - 16.3%
|
—
|
|
|
—
|
|
|
||
|
|
—
|
|
|
—
|
|
|
||
Hotels:
|
|
|
|
|
|
||||
New York City SMSA
|
1.0% - 18.4%
|
2,462
|
|
|
15,782
|
|
(2)
|
||
International
|
49.0%
|
2,161
|
|
|
2,334
|
|
|
||
|
|
4,623
|
|
|
18,116
|
|
|
||
Commercial:
|
|
|
|
|
|
||||
New York City SMSA
|
49.0%
|
1,852
|
|
|
1,867
|
|
|
||
All other U.S. areas
|
1.6%
|
7,634
|
|
|
7,053
|
|
|
||
|
|
9,486
|
|
|
8,920
|
|
|
||
|
|
|
|
|
|
||||
Other
|
15.0% - 50.0%
|
10,527
|
|
|
17,670
|
|
(3)
|
||
Investments in real estate ventures
|
|
$
|
131,556
|
|
|
$
|
141,105
|
|
|
(1)
|
The Range of Ownership reflects New Valley’s estimated current ownership percentage. New Valley’s actual ownership percentage as well as the percentage of earnings and cash distributions may ultimately differ as a result of a number of factors including potential dilution, financing or admission of additional partners.
|
(2)
|
One New York City SMSA venture, with a carrying value of $267, was reclassified from Condominium and Mixed Use Development to Hotels as of December 31, 2018.
|
(3)
|
One New York City SMSA venture, with a carrying value of $1,783, was reclassified from Apartment Buildings to Other as of December 31, 2018.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Condominium and Mixed Use Development:
|
|
|
|
||||
New York City SMSA
|
$
|
21,760
|
|
|
$
|
4,135
|
|
All other U.S. areas
|
29,993
|
|
|
—
|
|
||
|
51,753
|
|
|
4,135
|
|
||
Apartment Buildings:
|
|
|
|
||||
New York City SMSA
|
—
|
|
|
975
|
|
||
|
—
|
|
|
975
|
|
||
Hotels:
|
|
|
|
||||
New York City SMSA
|
172
|
|
|
168
|
|
||
|
172
|
|
|
168
|
|
||
|
|
|
|
||||
Other
|
604
|
|
|
4,450
|
|
||
Total contributions
|
$
|
52,529
|
|
|
$
|
9,728
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Condominium and Mixed Use Development:
|
|
|
|
||||
New York City SMSA
|
$
|
7,955
|
|
|
$
|
39,207
|
|
All other U.S. areas
|
1,279
|
|
|
—
|
|
||
|
9,234
|
|
|
39,207
|
|
||
Apartment Buildings:
|
|
|
|
||||
New York City SMSA
|
—
|
|
|
27,569
|
|
||
All other U.S. areas
|
79
|
|
|
422
|
|
||
|
79
|
|
|
27,991
|
|
||
Hotels:
|
|
|
|
||||
New York City SMSA
|
21,572
|
|
|
1,542
|
|
||
International
|
215
|
|
|
220
|
|
||
|
21,787
|
|
|
1,762
|
|
||
Commercial:
|
|
|
|
||||
New York City SMSA
|
16
|
|
|
9
|
|
||
All other U.S. areas
|
250
|
|
|
10,139
|
|
||
|
266
|
|
|
10,148
|
|
||
|
|
|
|
||||
Other
|
16,962
|
|
|
1,060
|
|
||
Total distributions
|
$
|
48,328
|
|
|
$
|
80,168
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Condominium and Mixed Use Development:
|
|
|
|
|
|
||||||
New York City SMSA
|
$
|
(31,011
|
)
|
|
$
|
(923
|
)
|
|
$
|
35,578
|
|
All other U.S. areas
|
(6,467
|
)
|
|
(1,063
|
)
|
|
(2,063
|
)
|
|||
|
(37,478
|
)
|
|
(1,986
|
)
|
|
33,515
|
|
|||
Apartment Buildings:
|
|
|
|
|
|
||||||
New York City SMSA
|
—
|
|
|
17,467
|
|
|
(6,703
|
)
|
|||
All other U.S. areas
|
79
|
|
|
164
|
|
|
(532
|
)
|
|||
|
79
|
|
|
17,631
|
|
|
(7,235
|
)
|
|||
Hotels:
|
|
|
|
|
|
||||||
New York City SMSA
|
8,081
|
|
|
(2,727
|
)
|
|
(5,347
|
)
|
|||
International
|
41
|
|
|
(246
|
)
|
|
232
|
|
|||
|
8,122
|
|
|
(2,973
|
)
|
|
(5,115
|
)
|
|||
Commercial:
|
|
|
|
|
|
||||||
New York City SMSA
|
1
|
|
|
(562
|
)
|
|
(742
|
)
|
|||
All other U.S. areas
|
773
|
|
|
1,608
|
|
|
403
|
|
|||
|
774
|
|
|
1,046
|
|
|
(339
|
)
|
|||
|
|
|
|
|
|
||||||
Other
|
9,215
|
|
|
728
|
|
|
569
|
|
|||
Total equity in (losses) earnings from real estate ventures
|
$
|
(19,288
|
)
|
|
$
|
14,446
|
|
|
$
|
21,395
|
|
|
December 31, 2019
|
||
Condominium and Mixed Use Development:
|
|
||
New York City SMSA
|
$
|
54,208
|
|
All other U.S. areas
|
55,842
|
|
|
|
110,050
|
|
|
Hotels:
|
|
||
New York City SMSA
|
2,462
|
|
|
International
|
2,161
|
|
|
|
4,623
|
|
|
Commercial:
|
|
||
New York City SMSA
|
1,852
|
|
|
All other U.S. areas
|
7,634
|
|
|
|
9,486
|
|
|
Other
|
24,626
|
|
|
Total maximum exposure to loss
|
$
|
148,785
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
281
|
|
|
$
|
28,539
|
|
|
$
|
197,157
|
|
Cost of goods sold
|
—
|
|
|
24,250
|
|
|
116,120
|
|
|||
Other expenses (income)
|
8,877
|
|
|
(4,236
|
)
|
|
11,649
|
|
|||
(Loss) income from continuing operations
|
$
|
(8,596
|
)
|
|
$
|
8,525
|
|
|
$
|
69,388
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
4,989
|
|
|
$
|
2,369
|
|
Total assets
|
15,186
|
|
|
15,071
|
|
||
Total debt
|
3,275
|
|
|
3,319
|
|
||
Total liabilities
|
3,575
|
|
|
3,616
|
|
||
Non-controlling interest
|
10,228
|
|
|
10,091
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
386,470
|
|
|
$
|
14,625
|
|
|
$
|
4,216
|
|
Cost of goods sold
|
220,316
|
|
|
—
|
|
|
—
|
|
|||
Other expenses
|
141,742
|
|
|
26,357
|
|
|
18,508
|
|
|||
Income (loss) from continuing operations
|
$
|
24,412
|
|
|
$
|
(11,732
|
)
|
|
$
|
(14,292
|
)
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
—
|
|
|
$
|
215,956
|
|
Total assets
|
—
|
|
|
220,350
|
|
||
Total debt
|
—
|
|
|
209,602
|
|
||
Total liabilities
|
—
|
|
|
212,640
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
5
|
|
|
$
|
28
|
|
|
$
|
(768
|
)
|
Other expenses
|
6,658
|
|
|
146,286
|
|
|
2,696
|
|
|||
Loss from continuing operations
|
$
|
(6,653
|
)
|
|
$
|
(146,258
|
)
|
|
$
|
(3,464
|
)
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
504,221
|
|
|
$
|
403,815
|
|
Total assets
|
512,038
|
|
|
419,518
|
|
||
Total debt
|
460,124
|
|
|
408,779
|
|
||
Total liabilities
|
544,687
|
|
|
445,514
|
|
||
Non-controlling interest
|
(23,942
|
)
|
|
(19,064
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
208,481
|
|
|
$
|
365,890
|
|
|
$
|
176,306
|
|
Cost of goods sold
|
76,162
|
|
|
71,623
|
|
|
93,766
|
|
|||
Other expenses
|
132,931
|
|
|
44,211
|
|
|
47,590
|
|
|||
(Loss) income from continuing operations
|
$
|
(612
|
)
|
|
$
|
250,056
|
|
|
$
|
34,950
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
3,569,915
|
|
|
$
|
2,541,994
|
|
Total assets
|
3,628,402
|
|
|
2,701,652
|
|
||
Total debt
|
2,593,606
|
|
|
1,798,296
|
|
||
Total liabilities
|
2,896,607
|
|
|
2,036,431
|
|
||
Non-controlling interest
|
69,787
|
|
|
150,897
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
70,862
|
|
|
$
|
44,366
|
|
|
$
|
66,588
|
|
Other expenses
|
67,094
|
|
|
105,899
|
|
|
64,431
|
|
|||
Income (loss) from continuing operations
|
$
|
3,768
|
|
|
$
|
(61,533
|
)
|
|
$
|
2,157
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
545,400
|
|
|
$
|
558,268
|
|
Total assets
|
562,879
|
|
|
574,664
|
|
||
Total debt
|
402,526
|
|
|
412,447
|
|
||
Total liabilities
|
410,723
|
|
|
420,164
|
|
||
Non-controlling interest
|
114,193
|
|
|
115,952
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
147,446
|
|
|
$
|
171,949
|
|
|
$
|
75,862
|
|
Cost of goods sold
|
5,399
|
|
|
4,522
|
|
|
4,035
|
|
|||
Other expenses
|
220,045
|
|
|
268,007
|
|
|
112,124
|
|
|||
Loss from continuing operations
|
$
|
(77,998
|
)
|
|
$
|
(100,580
|
)
|
|
$
|
(40,297
|
)
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
1,017,810
|
|
|
$
|
1,019,133
|
|
Total assets
|
1,133,697
|
|
|
1,126,598
|
|
||
Total debt
|
778,194
|
|
|
696,200
|
|
||
Total liabilities
|
816,118
|
|
|
736,101
|
|
||
Non-controlling interest
|
284,298
|
|
|
348,451
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
31,980
|
|
|
$
|
56,773
|
|
|
$
|
6,636
|
|
Other expenses
|
7,724
|
|
|
11,647
|
|
|
3,294
|
|
|||
Income from continuing operations
|
$
|
24,256
|
|
|
$
|
45,126
|
|
|
$
|
3,342
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
52,384
|
|
|
$
|
53,193
|
|
Total assets
|
70,169
|
|
|
70,395
|
|
||
Total debt
|
55,625
|
|
|
55,625
|
|
||
Total liabilities
|
54,342
|
|
|
54,645
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Income Statement
|
|
|
|
|
|
||||||
Revenue
|
$
|
4,008
|
|
|
$
|
4,823
|
|
|
$
|
3,442
|
|
Other expenses
|
13,515
|
|
|
6,382
|
|
|
5,069
|
|
|||
Loss income from continuing operations
|
$
|
(9,507
|
)
|
|
$
|
(1,559
|
)
|
|
$
|
(1,627
|
)
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Balance Sheets
|
|
|
|
||||
Investment in real estate
|
$
|
1,054,134
|
|
|
$
|
710,549
|
|
Total assets
|
1,192,149
|
|
|
1,152,124
|
|
||
Total debt
|
671,845
|
|
|
658,592
|
|
||
Total liabilities
|
850,587
|
|
|
665,463
|
|
||
Non-controlling interest
|
263,438
|
|
|
392,933
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Escena, net
|
$
|
9,972
|
|
|
$
|
10,170
|
|
Sagaponack
|
18,345
|
|
|
16,050
|
|
||
Investment in real estate, net
|
$
|
28,317
|
|
|
$
|
26,220
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Land and land improvements
|
$
|
8,910
|
|
|
$
|
8,910
|
|
Building and building improvements
|
1,926
|
|
|
1,900
|
|
||
Other
|
1,659
|
|
|
2,162
|
|
||
|
12,495
|
|
|
12,972
|
|
||
Less accumulated depreciation
|
(2,523
|
)
|
|
(2,802
|
)
|
||
|
$
|
9,972
|
|
|
$
|
10,170
|
|
10.
|
GOODWILL AND OTHER INTANGIBLE ASSETS
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Goodwill
|
|
$
|
78,008
|
|
|
$
|
77,568
|
|
|
|
|
|
|
||||
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
|
|
474
|
|
|
1,532
|
|
||
|
|
|
|
|
||||
Total goodwill and other intangible assets, net
|
|
$
|
265,993
|
|
|
$
|
266,611
|
|
|
Useful Lives in Years
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
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
|
|
||
Other intangibles
|
1 - 5
|
|
4,689
|
|
|
1,724
|
|
||
|
|
|
4,689
|
|
|
15,168
|
|
||
Less: Accumulated amortization on amortizable intangibles
|
|
|
(4,215
|
)
|
|
(13,636
|
)
|
||
Other intangibles, net
|
|
|
$
|
474
|
|
|
$
|
1,532
|
|
|
|
|
|
|
|
||||
Contract liabilities assumed:
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
Unfavorable leases
|
1 - 10
|
|
$
|
—
|
|
|
$
|
4,022
|
|
Less: Accumulated amortization on unfavorable leases
|
|
|
—
|
|
|
(3,076
|
)
|
||
Unfavorable leases, net
|
|
|
$
|
—
|
|
|
$
|
946
|
|
|
|
|
|
|
|
11.
|
NOTES PAYABLE, LONG-TERM DEBT AND OTHER OBLIGATIONS
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Vector:
|
|
|
|
|
|||
6.125% Senior Secured Notes due 2025
|
$
|
850,000
|
|
|
$
|
850,000
|
|
10.5% Senior Notes due 2026, net of unamortized discount of $3,392 and $0
|
551,608
|
|
|
325,000
|
|
||
5.5% Variable Interest Senior Convertible Debentures due 2020, net of unamortized discount of $5,276 and $29,465*
|
164,334
|
|
|
202,535
|
|
||
7.5% Variable Interest Senior Convertible Notes due 2019, net of unamortized discount of $0 and $3,359*
|
—
|
|
|
226,641
|
|
||
|
|
|
|
||||
Liggett:
|
|
|
|
||||
Revolving credit facility
|
34,952
|
|
|
28,381
|
|
||
Term loan under credit facility
|
—
|
|
|
2,409
|
|
||
Equipment loans
|
347
|
|
|
1,039
|
|
||
Other
|
30,146
|
|
|
30,440
|
|
||
Total notes payable, long-term debt and other obligations
|
1,631,387
|
|
|
1,666,445
|
|
||
Less:
|
|
|
|
||||
Debt issuance costs
|
(24,902
|
)
|
|
(23,614
|
)
|
||
Total notes payable, long-term debt and other obligations
|
1,606,485
|
|
|
1,642,831
|
|
||
Less:
|
|
|
|
|
|
||
Current maturities
|
(209,269
|
)
|
|
(256,134
|
)
|
||
Amount due after one year
|
$
|
1,397,216
|
|
|
$
|
1,386,697
|
|
*
|
The fair value of the derivatives embedded within the 5.5% Variable Interest Senior Convertible Debentures ($4,999 at December 31, 2019 and $24,789 at December 31, 2018, respectively) and the 7.5% Variable Interest Senior Convertible Debentures ($6,635 at December 31, 2018) is separately classified as a derivative liability in the consolidated balance sheets.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||
|
Conversion Price
|
|
Shares per $1,000
|
|
Conversion Price
|
|
Shares per $1,000
|
||||||
|
|
|
|
|
|
|
|
||||||
7.5% Convertible Notes
|
$
|
—
|
|
|
—
|
|
|
$
|
13.14
|
|
|
76.0595
|
|
5.5% Convertible Notes
|
$
|
20.27
|
|
|
49.3363
|
|
|
$
|
20.27
|
|
|
49.3363
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
7.5% Convertible Notes
|
$
|
2,031
|
|
|
$
|
39,845
|
|
|
$
|
23,720
|
|
5.5% Convertible Notes
|
16,481
|
|
|
15,924
|
|
|
13,490
|
|
|||
Interest expense associated with embedded derivatives
|
$
|
18,512
|
|
|
$
|
55,769
|
|
|
$
|
37,210
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
7.5% Convertible Notes
|
$
|
6,635
|
|
|
$
|
24,530
|
|
|
$
|
21,734
|
|
5.5% Convertible Notes
|
19,790
|
|
|
20,459
|
|
|
14,185
|
|
|||
Gain on changes in fair value of derivatives embedded within convertible debt
|
$
|
26,425
|
|
|
$
|
44,989
|
|
|
$
|
35,919
|
|
|
7.5%
Convertible
Notes
|
|
5.5% Convertible Notes
|
|
Total
|
||||||
Balance at January 1, 2017
|
$
|
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
|
|
|||
Gain from changes in fair value of embedded derivatives
|
(24,530
|
)
|
|
(20,459
|
)
|
|
(44,989
|
)
|
|||
Balance at December 31, 2018
|
6,635
|
|
|
24,789
|
|
|
31,424
|
|
|||
Gain from changes in fair value of embedded derivatives
|
(6,635
|
)
|
|
(19,790
|
)
|
|
(26,425
|
)
|
|||
Balance at December 31, 2019
|
$
|
—
|
|
|
$
|
4,999
|
|
|
$
|
4,999
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Amortization of beneficial conversion feature:
|
|
|
|
|
|
|
|
|
|||
7.5% Convertible Notes
|
$
|
1,328
|
|
|
$
|
26,049
|
|
|
$
|
15,507
|
|
5.5% Convertible Notes
|
4,973
|
|
|
4,805
|
|
|
4,070
|
|
|||
Interest expense associated with beneficial conversion feature
|
$
|
6,301
|
|
|
$
|
30,854
|
|
|
$
|
19,577
|
|
|
7.5%
Convertible
Notes
|
|
5.5% Convertible Notes
|
|
Total
|
||||||
Balance at January 1, 2017
|
$
|
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
|
|
|||
Partial redemption of 5.5% convertible notes
|
—
|
|
|
(3,493
|
)
|
|
(3,493
|
)
|
|||
Amortization of embedded derivatives
|
(39,845
|
)
|
|
(15,924
|
)
|
|
(55,769
|
)
|
|||
Amortization of beneficial conversion feature
|
(26,049
|
)
|
|
(4,805
|
)
|
|
(30,854
|
)
|
|||
Balance at December 31, 2018
|
3,359
|
|
|
29,465
|
|
|
32,824
|
|
|||
Partial redemption of 5.5% convertible notes
|
—
|
|
|
(2,735
|
)
|
|
(2,735
|
)
|
|||
Amortization of embedded derivatives
|
(2,031
|
)
|
|
(16,481
|
)
|
|
(18,512
|
)
|
|||
Amortization of beneficial conversion feature
|
(1,328
|
)
|
|
(4,973
|
)
|
|
(6,301
|
)
|
|||
Balance at December 31, 2019
|
$
|
—
|
|
|
$
|
5,276
|
|
|
$
|
5,276
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Senior Notes
|
$
|
1,401,608
|
|
|
$
|
1,409,920
|
|
|
$
|
1,175,000
|
|
|
$
|
1,034,500
|
|
Variable Interest Senior Convertible Debt
|
164,334
|
|
|
176,289
|
|
|
429,176
|
|
|
468,704
|
|
||||
Liggett and other
|
65,445
|
|
|
65,456
|
|
|
62,269
|
|
|
62,255
|
|
||||
Notes payable and long-term debt
|
$
|
1,631,387
|
|
(1)
|
$
|
1,651,665
|
|
|
$
|
1,666,445
|
|
(1)
|
$
|
1,565,459
|
|
|
Principal
|
|
Unamortized
Discount/ (Premium)
|
|
Net
|
||||||
Year Ending December 31:
|
|
|
|
|
|
|
|
||||
2020
|
$
|
214,947
|
|
|
$
|
5,276
|
|
|
$
|
209,671
|
|
2021
|
10,026
|
|
|
—
|
|
|
10,026
|
|
|||
2022
|
10,045
|
|
|
—
|
|
|
10,045
|
|
|||
2023
|
29
|
|
|
—
|
|
|
29
|
|
|||
2024
|
8
|
|
|
—
|
|
|
8
|
|
|||
Thereafter
|
1,405,000
|
|
|
3,392
|
|
|
1,401,608
|
|
|||
Total
|
$
|
1,640,055
|
|
|
$
|
8,668
|
|
|
$
|
1,631,387
|
|
12.
|
EMPLOYEE BENEFIT PLANS
|
|
Pension Benefits
|
|
Other
Postretirement Benefits
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Benefit obligation at January 1
|
$
|
(123,165
|
)
|
|
$
|
(132,722
|
)
|
|
$
|
(8,296
|
)
|
|
$
|
(8,967
|
)
|
Service cost
|
(533
|
)
|
|
(587
|
)
|
|
(3
|
)
|
|
(4
|
)
|
||||
Interest cost
|
(4,860
|
)
|
|
(4,495
|
)
|
|
(347
|
)
|
|
(330
|
)
|
||||
Plan amendment
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
||||
Benefits paid
|
7,696
|
|
|
8,524
|
|
|
594
|
|
|
553
|
|
||||
Expenses paid
|
391
|
|
|
260
|
|
|
—
|
|
|
—
|
|
||||
Actuarial gain
|
(8,526
|
)
|
|
5,855
|
|
|
(934
|
)
|
|
491
|
|
||||
Benefit obligation at December 31
|
$
|
(128,997
|
)
|
|
$
|
(123,165
|
)
|
|
$
|
(8,986
|
)
|
|
$
|
(8,296
|
)
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fair value of plan assets at January 1
|
$
|
93,167
|
|
|
$
|
106,192
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
15,788
|
|
|
(4,497
|
)
|
|
—
|
|
|
—
|
|
||||
Expenses paid
|
(391
|
)
|
|
(260
|
)
|
|
—
|
|
|
—
|
|
||||
Contributions
|
183
|
|
|
256
|
|
|
594
|
|
|
553
|
|
||||
Benefits paid
|
(7,696
|
)
|
|
(8,524
|
)
|
|
(594
|
)
|
|
(553
|
)
|
||||
Fair value of plan assets at December 31
|
$
|
101,051
|
|
|
$
|
93,167
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unfunded status at December 31
|
$
|
(27,946
|
)
|
|
$
|
(29,998
|
)
|
|
$
|
(8,986
|
)
|
|
$
|
(8,296
|
)
|
Amounts recognized in the consolidated balance sheets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Prepaid pension costs
|
$
|
31,686
|
|
|
$
|
23,869
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other accrued liabilities
|
(111
|
)
|
|
(228
|
)
|
|
(654
|
)
|
|
(647
|
)
|
||||
Non-current employee benefit liabilities
|
(59,521
|
)
|
|
(53,639
|
)
|
|
(8,332
|
)
|
|
(7,649
|
)
|
||||
Net amounts recognized
|
$
|
(27,946
|
)
|
|
$
|
(29,998
|
)
|
|
$
|
(8,986
|
)
|
|
$
|
(8,296
|
)
|
|
Pension Benefits
|
|
Other Postretirement
Benefits
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Service cost — benefits earned during the period
|
$
|
533
|
|
|
$
|
587
|
|
|
$
|
564
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
5
|
|
Interest cost on projected benefit obligation
|
4,860
|
|
|
4,495
|
|
|
5,059
|
|
|
347
|
|
|
330
|
|
|
368
|
|
||||||
Expected return on assets
|
(4,874
|
)
|
|
(5,572
|
)
|
|
(5,424
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
||||||
Amortization of net loss (gain)
|
2,001
|
|
|
1,804
|
|
|
2,009
|
|
|
(40
|
)
|
|
(41
|
)
|
|
(54
|
)
|
||||||
Net expense
|
$
|
2,520
|
|
|
$
|
1,314
|
|
|
$
|
2,208
|
|
|
$
|
314
|
|
|
$
|
297
|
|
|
$
|
319
|
|
|
Defined
Benefit
Pension Plans
|
|
Post-
Retirement
Plans
|
|
Total
|
||||||
Prior service cost
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Actuarial loss
|
$
|
1,836
|
|
|
$
|
11
|
|
|
$
|
1,847
|
|
|
Defined
Benefit
Pension Plans
|
|
Post-
Retirement
Plans
|
|
Total
|
||||||
Accumulated other comprehensive (loss) income as of January 1, 2019
|
$
|
(34,053
|
)
|
|
$
|
213
|
|
|
$
|
(33,840
|
)
|
Amortization of prior service costs
|
—
|
|
|
4
|
|
|
4
|
|
|||
Prior service costs
|
—
|
|
|
(37
|
)
|
|
(37
|
)
|
|||
Amortization of loss (gain)
|
2,001
|
|
|
(40
|
)
|
|
1,961
|
|
|||
Net gain (loss) arising during the year
|
2,388
|
|
|
(934
|
)
|
|
1,454
|
|
|||
Accumulated other comprehensive loss as of December 31, 2019
|
$
|
(29,664
|
)
|
|
$
|
(794
|
)
|
|
$
|
(30,458
|
)
|
|
Defined
Benefit
Pension Plans
|
|
Post-
Retirement
Plans
|
|
Total
|
||||||
Accumulated other comprehensive loss as of January 1, 2018
|
$
|
(31,643
|
)
|
|
$
|
(237
|
)
|
|
$
|
(31,880
|
)
|
Amortization of loss (gain)
|
1,804
|
|
|
(41
|
)
|
|
1,763
|
|
|||
Net (loss) gain arising during the year
|
(4,214
|
)
|
|
491
|
|
|
(3,723
|
)
|
|||
Accumulated other comprehensive loss (income) as of December 31, 2018
|
$
|
(34,053
|
)
|
|
$
|
213
|
|
|
$
|
(33,840
|
)
|
|
Pension Benefits
|
|
Other Postretirement Benefits
|
||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
Weighted average assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
Discount rates — benefit obligation
|
2.55% - 3.1%
|
|
3.9% - 4.25%
|
|
3.25% - 3.7%
|
|
3.30%
|
|
4.35%
|
|
3.80%
|
Discount rates — service cost
|
3.9% - 4.25%
|
|
3.25% - 3.7%
|
|
3.6% - 4.2%
|
|
4.35%
|
|
3.80%
|
|
4.40%
|
Assumed rates of return on invested assets
|
5.50%
|
|
5.50%
|
|
5.50%
|
|
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,
|
||||
|
2019
|
|
2018
|
||
Asset category:
|
|
|
|
|
|
Equity securities
|
38
|
%
|
|
52
|
%
|
Investment grade fixed income securities
|
53
|
%
|
|
39
|
%
|
High yield fixed income securities
|
9
|
%
|
|
9
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
2019
|
|
2018
|
||||
Balance as of January 1
|
$
|
—
|
|
|
$
|
127
|
|
Distributions
|
—
|
|
|
(127
|
)
|
||
Balance as of December 31
|
$
|
—
|
|
|
$
|
—
|
|
|
1% Increase
|
|
1% Decrease
|
||||
Effect on total of service and interest cost components
|
$
|
2
|
|
|
$
|
(2
|
)
|
Effect on benefit obligation
|
47
|
|
|
(44
|
)
|
|
Pension
|
|
Postretirement
Medical
|
||||
2020
|
$
|
7,548
|
|
|
$
|
655
|
|
2021
|
14,708
|
|
|
651
|
|
||
2022
|
6,614
|
|
|
650
|
|
||
2023
|
6,200
|
|
|
644
|
|
||
2024
|
56,959
|
|
|
640
|
|
||
2025 - 2029
|
23,303
|
|
|
2,897
|
|
13.
|
INCOME TAXES
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
U.S. Federal
|
$
|
33,379
|
|
|
$
|
27,962
|
|
|
$
|
28,271
|
|
State
|
10,632
|
|
|
11,225
|
|
|
3,458
|
|
|||
|
$
|
44,011
|
|
|
$
|
39,187
|
|
|
$
|
31,729
|
|
Deferred:
|
|
|
|
|
|
|
|
|
|||
U.S. Federal
|
$
|
(7,209
|
)
|
|
$
|
(12,524
|
)
|
|
$
|
(31,049
|
)
|
State
|
(3,989
|
)
|
|
(5,111
|
)
|
|
(2,262
|
)
|
|||
|
(11,198
|
)
|
|
(17,635
|
)
|
|
(33,311
|
)
|
|||
Total
|
$
|
32,813
|
|
|
$
|
21,552
|
|
|
$
|
(1,582
|
)
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Employee benefit accruals
|
$
|
11,709
|
|
|
$
|
12,801
|
|
Impairment of investments
|
9,772
|
|
|
4,131
|
|
||
Impact of timing of settlement payments
|
19,313
|
|
|
20,551
|
|
||
Disallowed interest expense carryforward
|
—
|
|
|
1,619
|
|
||
Various U.S. state tax loss carryforwards
|
4,296
|
|
|
5,137
|
|
||
Operating lease liabilities
|
3,679
|
|
|
—
|
|
||
Other
|
2,274
|
|
|
1,966
|
|
||
|
51,043
|
|
|
46,205
|
|
||
Less: Valuation allowance
|
(1,292
|
)
|
|
(3,817
|
)
|
||
Net deferred tax assets
|
$
|
49,751
|
|
|
$
|
42,388
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Basis differences on non-consolidated entities (1)
|
$
|
(7,990
|
)
|
|
$
|
(7,752
|
)
|
Basis differences on fixed and intangible assets
|
(35,082
|
)
|
|
(35,854
|
)
|
||
Capitalized interest expense (1)
|
—
|
|
|
(6,532
|
)
|
||
Basis differences on inventory
|
(10,645
|
)
|
|
(11,497
|
)
|
||
Basis differences on long-term investments
|
(22,424
|
)
|
|
(16,496
|
)
|
||
Impact of accounting for convertible debt
|
(813
|
)
|
|
(385
|
)
|
||
Basis differences on available for sale securities
|
(3,219
|
)
|
|
(1,283
|
)
|
||
Operating lease right of use assets
|
(3,273
|
)
|
|
—
|
|
||
|
$
|
(83,446
|
)
|
|
$
|
(79,799
|
)
|
|
|
|
|
||||
Net deferred tax liabilities
|
$
|
(33,695
|
)
|
|
$
|
(37,411
|
)
|
(1)
|
The Company reclassified its capitalized interest expense to its basis differences on non-consolidated entities during the year ended December 31, 2019.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Income before provision for income taxes
|
$
|
133,828
|
|
|
$
|
79,559
|
|
|
$
|
89,168
|
|
Federal income tax expense at statutory rate
|
28,104
|
|
|
16,707
|
|
|
31,209
|
|
|||
Increases (decreases) resulting from:
|
|
|
|
|
|
|
|
||||
State income taxes, net of federal income tax benefits
|
6,430
|
|
|
6,060
|
|
|
3,833
|
|
|||
Impact of non-controlling interest
|
(9
|
)
|
|
21
|
|
|
(2,162
|
)
|
|||
Non-deductible expenses
|
1,385
|
|
|
1,993
|
|
|
2,146
|
|
|||
Impact of domestic production deduction
|
—
|
|
|
359
|
|
|
(2,960
|
)
|
|||
Impact of Tax Cuts and Jobs Act of 2017
|
—
|
|
|
(2,691
|
)
|
|
(28,845
|
)
|
|||
Excess tax benefits on stock-based compensation
|
(1,488
|
)
|
|
(778
|
)
|
|
(1,143
|
)
|
|||
Tax credits
|
(166
|
)
|
|
(127
|
)
|
|
(2,683
|
)
|
|||
Other
|
791
|
|
|
(545
|
)
|
|
(155
|
)
|
|||
Inclusion of tax liabilities from unincorporated entities
|
291
|
|
|
400
|
|
|
(47
|
)
|
|||
Changes in valuation allowance, net of equity and tax audit adjustments
|
(2,525
|
)
|
|
153
|
|
|
(775
|
)
|
|||
Income tax expense (benefit)
|
$
|
32,813
|
|
|
$
|
21,552
|
|
|
$
|
(1,582
|
)
|
Balance at January 1, 2017
|
$
|
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
|
|
|
Additions based on tax positions related to prior years
|
26
|
|
|
Settlements
|
(100
|
)
|
|
Expirations of the statute of limitations
|
(163
|
)
|
|
Balance at December 31, 2018
|
391
|
|
|
Additions based on tax positions related to prior years
|
1,586
|
|
|
Settlements
|
—
|
|
|
Expirations of the statute of limitations
|
(330
|
)
|
|
Balance at December 31, 2019
|
$
|
1,647
|
|
14.
|
STOCK COMPENSATION
|
|
2019
|
|
2018
|
|
2017
|
|||
Risk-free interest rate
|
2.5% - 2.7%
|
|
|
2.7% - 2.9%
|
|
|
2.1% - 2.4%
|
|
Expected volatility
|
20.24% - 20.45%
|
|
|
19.02% - 21.05%
|
|
|
18.88% - 21.62%
|
|
Dividend yield
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
Expected holding period
|
4.00 – 10.00 years
|
|
5.00 – 10.00 years
|
|
6.00 – 10.00 years
|
|
||
Weighted-average grant date fair value (1)
|
$2.36 - $4.08
|
|
|
$4.62 - $7.58
|
|
|
$5.39 - $8.17
|
|
|
Number of
Shares
|
|
Weighted-Average
Exercise Price
|
|
Weighted-Average
Remaining
Contractual Term
(Years)
|
|
Aggregate
Intrinsic
Value(1)
|
|||||
Outstanding on January 1, 2017
|
4,985,059
|
|
|
$
|
12.10
|
|
|
5.3
|
|
$
|
37,557
|
|
Granted
|
448,580
|
|
|
$
|
19.70
|
|
|
|
|
|
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Canceled
|
(13
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
Outstanding on December 31, 2017
|
5,433,626
|
|
|
$
|
12.74
|
|
|
4.7
|
|
$
|
41,069
|
|
Granted
|
427,219
|
|
|
$
|
18.42
|
|
|
|
|
|
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Canceled
|
(12
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
Outstanding on December 31, 2018
|
5,860,833
|
|
|
$
|
13.16
|
|
|
4.1
|
|
$
|
1,095
|
|
Granted
|
406,875
|
|
|
$
|
10.92
|
|
|
|
|
|
|
|
Exercised
|
(1,824,351
|
)
|
|
$
|
8.67
|
|
|
|
|
|
|
|
Canceled
|
(11
|
)
|
|
$
|
—
|
|
|
|
|
|
||
Outstanding on December 31, 2019
|
4,443,346
|
|
|
$
|
14.80
|
|
|
5.0
|
|
$
|
4,427
|
|
Options exercisable at:
|
|
|
|
|
|
|
|
|
|
|
||
December 31, 2017
|
3,500,201
|
|
|
|
|
|
|
|
|
|
||
December 31, 2018
|
4,019,477
|
|
|
|
|
|
|
|
|
|
||
December 31, 2019
|
2,689,673
|
|
|
|
|
|
|
|
|
|
(1)
|
The aggregate intrinsic value represents the amount by which the fair value of the underlying common stock ($13.39, $9.27 and $20.30 at December 31, 2019, 2018 and 2017, 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
|
||||||||||
|
12/31/2019
|
|
|
|
12/31/2019
|
|
|
|
||||||||||||||||
$9.86
|
-
|
$11.83
|
|
2,082,717
|
|
|
3.7
|
|
$
|
11.26
|
|
|
1,675,842
|
|
|
2.4
|
|
$
|
11.35
|
|
|
$
|
—
|
|
$11.83
|
-
|
$13.80
|
|
—
|
|
|
0
|
|
$
|
—
|
|
|
—
|
|
|
0
|
|
$
|
—
|
|
|
—
|
|
|
$13.80
|
-
|
$15.77
|
|
519,278
|
|
|
4.4
|
|
$
|
14.68
|
|
|
519,278
|
|
|
4.4
|
|
$
|
14.68
|
|
|
—
|
|
|
$15.77
|
-
|
$17.74
|
|
—
|
|
|
0
|
|
$
|
—
|
|
|
—
|
|
|
0
|
|
$
|
—
|
|
|
—
|
|
|
$17.74
|
-
|
$19.71
|
|
1,841,351
|
|
|
6.6
|
|
$
|
18.84
|
|
|
494,553
|
|
|
5.2
|
|
$
|
18.12
|
|
|
—
|
|
|
|
|
|
|
4,443,346
|
|
|
5.0
|
|
$
|
14.80
|
|
|
2,689,673
|
|
|
3.3
|
|
$
|
13.24
|
|
|
$
|
4,427
|
|
State
|
|
Number
of Cases
|
Florida
|
|
32
|
Illinois
|
|
8
|
Nevada
|
|
4
|
New York
|
|
2
|
Louisiana
|
|
2
|
West Virginia
|
|
2
|
Ohio
|
|
1
|
•
|
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, 2017
|
$
|
16,192
|
|
|
$
|
3,659
|
|
|
$
|
19,851
|
|
|
$
|
22,257
|
|
|
$
|
27,513
|
|
|
$
|
49,770
|
|
Expenses
|
149,355
|
|
|
6,566
|
|
|
155,921
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Change in MSA obligations capitalized as inventory
|
76
|
|
|
—
|
|
|
76
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payments
|
(151,296
|
)
|
|
(17,537
|
)
|
|
(168,833
|
)
|
|
—
|
|
|
(3,426
|
)
|
|
(3,426
|
)
|
||||||
Reclassification to/(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
|
|
||||||
Expenses
|
168,820
|
|
|
735
|
|
|
169,555
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
NPM Settlement adjustment
|
(595
|
)
|
|
—
|
|
|
(595
|
)
|
|
(5,703
|
)
|
|
—
|
|
|
(5,703
|
)
|
||||||
Change in MSA obligations capitalized as inventory
|
(1,438
|
)
|
|
—
|
|
|
(1,438
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payments
|
(141,963
|
)
|
|
(935
|
)
|
|
(142,898
|
)
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
||||||
Reclassification to/(from) non-current liabilities
|
(647
|
)
|
|
218
|
|
|
(429
|
)
|
|
647
|
|
|
(218
|
)
|
|
429
|
|
||||||
Interest on withholding
|
—
|
|
|
32
|
|
|
32
|
|
|
—
|
|
|
2,172
|
|
|
2,172
|
|
||||||
Balance as of December 31, 2018
|
36,561
|
|
|
310
|
|
|
36,871
|
|
|
16,383
|
|
|
21,794
|
|
|
38,177
|
|
||||||
Expenses
|
165,471
|
|
|
990
|
|
|
166,461
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Change in MSA obligations capitalized as inventory
|
4,936
|
|
|
—
|
|
|
4,936
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payments
|
(171,960
|
)
|
|
(670
|
)
|
|
(172,630
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Reclassification to/(from) non-current liabilities
|
(892
|
)
|
|
3,338
|
|
|
2,446
|
|
|
892
|
|
|
(3,338
|
)
|
|
(2,446
|
)
|
||||||
Interest on withholding
|
—
|
|
|
281
|
|
|
281
|
|
|
—
|
|
|
2,138
|
|
|
2,138
|
|
||||||
Balance as of December 31, 2019
|
$
|
34,116
|
|
|
$
|
4,249
|
|
|
$
|
38,365
|
|
|
$
|
17,275
|
|
|
$
|
20,594
|
|
|
$
|
37,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
|||
Interest, including interest related to finance leases
|
$
|
118,974
|
|
|
$
|
107,021
|
|
|
$
|
117,453
|
|
Income taxes
|
44,184
|
|
|
26,529
|
|
|
26,885
|
|
|||
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
||||
Issuance of stock dividend
|
703
|
|
|
671
|
|
|
644
|
|
|||
Decrease in non-controlling interest related to purchase of subsidiary
|
—
|
|
|
(73,953
|
)
|
|
—
|
|
|||
Notes payable issued for purchase of subsidiary
|
—
|
|
|
30,000
|
|
|
—
|
|
|||
Contingent consideration related to purchase of subsidiary
|
—
|
|
|
6,304
|
|
|
—
|
|
|||
Net receivable from purchase of subsidiary
|
—
|
|
|
497
|
|
|
—
|
|
17.
|
RELATED PARTY TRANSACTIONS
|
18.
|
INVESTMENTS AND FAIR VALUE MEASUREMENTS
|
|
|
Fair Value Measurements as of December 31, 2019
|
||||||||||||||
Description
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs (Level 2) |
|
Significant Unobservable Inputs (Level 3) |
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Money market funds (1)
|
|
$
|
307,655
|
|
|
$
|
307,655
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper (1)
|
|
47,328
|
|
|
—
|
|
|
47,328
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit (2)
|
|
2,193
|
|
|
—
|
|
|
2,193
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Money market funds securing legal bonds (2)
|
|
535
|
|
|
535
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Investment securities at fair value
|
|
|
|
|
|
|
|
|
||||||||
Equity securities at fair value
|
|
|
|
|
|
|
|
|
||||||||
Marketable equity securities
|
|
23,819
|
|
|
23,819
|
|
|
—
|
|
|
—
|
|
||||
Mutual funds invested in fixed-income securities
|
|
22,377
|
|
|
22,377
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities at fair value
|
|
46,196
|
|
|
46,196
|
|
|
—
|
|
|
—
|
|
||||
Debt securities available for sale
|
|
|
|
|
|
|
|
|
||||||||
U.S. government securities
|
|
14,660
|
|
|
—
|
|
|
14,660
|
|
|
—
|
|
||||
Corporate securities
|
|
54,413
|
|
|
—
|
|
|
54,413
|
|
|
—
|
|
||||
U.S. government and federal agency
|
|
6,816
|
|
|
—
|
|
|
6,816
|
|
|
—
|
|
||||
Commercial mortgage-backed securities
|
|
382
|
|
|
—
|
|
|
382
|
|
|
—
|
|
||||
Commercial paper
|
|
5,887
|
|
|
—
|
|
|
5,887
|
|
|
—
|
|
||||
Index-linked U.S. bonds
|
|
779
|
|
|
—
|
|
|
779
|
|
|
—
|
|
||||
Foreign fixed-income securities
|
|
508
|
|
|
—
|
|
|
508
|
|
|
—
|
|
||||
Total debt securities available for sale
|
|
83,445
|
|
|
—
|
|
|
83,445
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total investment securities at fair value
|
|
129,641
|
|
|
46,196
|
|
|
83,445
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Long-term investments
|
|
|
|
|
|
|
|
|
||||||||
Equity securities at fair value that qualify for the NAV practical expedient (3)
|
|
45,781
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total
|
|
$
|
533,133
|
|
|
$
|
354,386
|
|
|
$
|
132,966
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Fair value of contingent liability
|
|
$
|
3,147
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,147
|
|
Fair value of derivatives embedded within convertible debt
|
|
4,999
|
|
|
—
|
|
|
—
|
|
|
4,999
|
|
||||
Total
|
|
$
|
8,146
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,146
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
(1)
|
Amounts included in Cash and cash equivalents on the consolidated balance sheet, except for $4,423 that is included in current restricted assets and $3,160 that is included in non-current restricted assets.
|
(2)
|
Amounts included in current restricted assets and non-current restricted assets on the consolidated balance sheet.
|
(3)
|
In accordance with Subtopic 820-10, investments that are measured at fair value using the NAV practical expedient are not classified in the fair value hierarchy.
|
|
|
Fair Value Measurements as of December 31, 2018
|
||||||||||||||
Description
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Money market funds (1)
|
|
$
|
448,560
|
|
|
$
|
448,560
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper (1)
|
|
46,062
|
|
|
—
|
|
|
46,062
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit (2)
|
|
2,251
|
|
|
—
|
|
|
2,251
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Money market funds securing legal bonds (2)
|
|
535
|
|
|
535
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Investment securities at fair value
|
|
|
|
|
|
|
|
|
||||||||
Equity securities at fair value
|
|
|
|
|
|
|
|
|
||||||||
Marketable equity securities
|
|
26,010
|
|
|
26,010
|
|
|
—
|
|
|
—
|
|
||||
Mutual funds invested in fixed-income securities
|
|
21,192
|
|
|
21,192
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities at fair value
|
|
47,202
|
|
|
47,202
|
|
|
—
|
|
|
—
|
|
||||
Debt securities available for sale
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. government securities
|
|
28,514
|
|
|
—
|
|
|
28,514
|
|
|
—
|
|
||||
Corporate securities
|
|
41,733
|
|
|
—
|
|
|
41,733
|
|
|
—
|
|
||||
U.S. government and federal agency
|
|
4,369
|
|
|
—
|
|
|
4,369
|
|
|
—
|
|
||||
Commercial mortgage-backed securities
|
|
401
|
|
|
—
|
|
|
401
|
|
|
—
|
|
||||
Commercial paper
|
|
5,870
|
|
|
—
|
|
|
5,870
|
|
|
—
|
|
||||
Index-linked U.S. bonds
|
|
2,330
|
|
|
—
|
|
|
2,330
|
|
|
—
|
|
||||
Foreign fixed-income securities
|
|
1,150
|
|
|
—
|
|
|
1,150
|
|
|
—
|
|
||||
Total debt securities available for sale
|
|
84,367
|
|
|
—
|
|
|
84,367
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total investment securities at fair value
|
|
131,569
|
|
|
47,202
|
|
|
84,367
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Long-term investments
|
|
|
|
|
|
|
|
|
|
|||||||
Equity securities at fair value that qualify for the NAV practical expedient (3)
|
|
54,628
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
683,605
|
|
|
$
|
496,297
|
|
|
$
|
132,680
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Fair value of contingent liability
|
|
$
|
6,304
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,304
|
|
Fair value of derivatives embedded within convertible debt
|
|
31,424
|
|
|
—
|
|
|
—
|
|
|
31,424
|
|
||||
Total
|
|
$
|
37,728
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37,728
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
(1)
|
Amounts included in Cash and cash equivalents on the consolidated balance sheet, except for $2,570 that is included in current restricted assets and $3,910 that is included in non-current restricted assets.
|
(2)
|
Amounts included in current restricted assets and non-current restricted assets on the consolidated balance sheet.
|
(3)
|
In accordance with Subtopic 820-10, investments that are measured at fair value using the NAV practical expedient are not classified in the fair value hierarchy.
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||||
|
|
Fair Value at
|
|
|
|
|
|
|
||||
|
|
December 31,
2019 |
|
Valuation Technique
|
|
Unobservable Input
|
|
Range (Actual)
|
||||
|
|
|
|
|
|
|
|
|
||||
Fair value of derivatives embedded within convertible debt
|
|
$
|
4,999
|
|
|
Discounted cash flow
|
|
Assumed annual 2019 stock dividend
|
|
5
|
%
|
|
|
|
|
|
|
|
Assumed remaining cash dividends - Q4 2019 and Q1 2020
|
|
$0.40/$0.20
|
|
|||
|
|
|
|
|
|
Stock price
|
|
$
|
13.39
|
|
||
|
|
|
|
|
|
Convertible trading price (as a percentage of par value)
|
|
103.94
|
%
|
|||
|
|
|
|
|
|
Maturity
|
|
April 15, 2020
|
|
|||
|
|
|
|
|
|
Volatility
|
|
36.94
|
%
|
|||
|
|
|
|
|
|
Risk-free rate
|
|
Term structure of US Treasury Securities
|
|
|||
|
|
|
|
|
|
Implied credit spread
|
|
1.0% - 3.0% (2.0%)
|
|
|||
|
|
|
|
|
|
|
|
|
||||
Fair value of contingent liability
|
|
$
|
3,147
|
|
|
Monte Carlo simulation model
|
|
Estimated fair value of the Douglas Elliman reporting unit
|
|
$
|
271,500
|
|
|
|
|
|
|
|
Risk-free rate for a 3-year term
|
|
1.61
|
%
|
|||
|
|
|
|
|
|
Leverage-adjusted equity volatility of peer firms
|
|
35.56
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||||
|
|
Fair Value at
|
|
|
|
|
|
|
||||
|
|
December 31,
2018 |
|
Valuation Technique
|
|
Unobservable Input
|
|
Range (Actual)
|
||||
|
|
|
|
|
|
|
|
|
||||
Fair value of derivatives embedded within convertible debt
|
|
$
|
31,424
|
|
|
Discounted cash flow
|
|
Assumed annual stock dividend
|
|
5
|
%
|
|
|
|
|
|
|
|
Assumed annual cash dividend (1)
|
|
$
|
1.60
|
|
||
|
|
|
|
|
|
Stock price (1)
|
|
$
|
9.73
|
|
||
|
|
|
|
|
|
Convertible trading price (as a percentage of par value)
|
|
100.31
|
%
|
|||
|
|
|
|
|
|
Maturity
|
|
April 15, 2020
|
|
|||
|
|
|
|
|
|
Volatility
|
|
20.39
|
%
|
|||
|
|
|
|
|
|
Risk-free rate
|
|
Term structure of US Treasury Securities
|
|
|||
|
|
|
|
|
|
Implied credit spread
|
|
8.0% - 9.0% (8.5%)
|
|
|||
|
|
|
|
|
|
|
|
|
||||
Fair value of contingent liability
|
|
$
|
6,304
|
|
|
Monte Carlo simulation model
|
|
Estimated fair value of the Douglas Elliman reporting unit
|
|
$
|
320,000
|
|
|
|
|
|
|
|
Risk-free rate for a 4-year term
|
|
2.45
|
%
|
|||
|
|
|
|
|
|
Leverage-adjusted equity volatility of peer firms
|
|
30.22
|
%
|
|
|
|
|
Fair Value Measurement Using:
|
||||||||||||||||
|
|
Year Ended December 31,
2019 |
|
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs (Level 2) |
|
Significant Unobservable Inputs (Level 3) |
||||||||||
Description
|
|
Impairment Charge
|
|
Total
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investments in real estate ventures
|
|
$
|
39,757
|
|
|
$
|
18,335
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,335
|
|
|
|
|
Real
|
|
Corporate
|
|
|
||||||||
|
Tobacco
|
|
Estate
|
|
and Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
2019
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
1,114,840
|
|
|
$
|
788,871
|
|
|
$
|
—
|
|
|
$
|
1,903,711
|
|
Operating income (loss)
|
261,630
|
|
(1)
|
(2,930
|
)
|
|
(27,565
|
)
|
|
231,135
|
|
||||
Equity in losses from real estate ventures
|
—
|
|
|
(19,288
|
)
|
|
—
|
|
|
(19,288
|
)
|
||||
Identifiable assets
|
336,566
|
|
|
666,550
|
|
(4)
|
501,973
|
|
(6)
|
1,505,089
|
|
||||
Depreciation and amortization
|
7,824
|
|
|
9,033
|
|
|
994
|
|
|
17,851
|
|
||||
Capital expenditures
|
4,173
|
|
|
8,276
|
|
|
126
|
|
|
12,575
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
1,111,094
|
|
|
$
|
759,168
|
|
|
$
|
—
|
|
|
$
|
1,870,262
|
|
Operating income (loss)
|
246,527
|
|
(2)
|
3,435
|
|
(5)
|
(25,913
|
)
|
|
224,049
|
|
||||
Equity in earnings from real estate ventures
|
—
|
|
|
14,446
|
|
|
—
|
|
|
14,446
|
|
||||
Identifiable assets
|
315,706
|
|
|
539,828
|
|
(4)
|
693,970
|
|
(6)
|
1,549,504
|
|
||||
Depreciation and amortization
|
8,210
|
|
|
9,580
|
|
|
1,017
|
|
|
18,807
|
|
||||
Capital expenditures
|
4,599
|
|
|
13,061
|
|
|
22
|
|
|
17,682
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
1,080,950
|
|
|
$
|
727,364
|
|
|
$
|
(838
|
)
|
|
$
|
1,807,476
|
|
Operating income (loss)
|
240,400
|
|
(3)
|
21,439
|
|
|
(26,191
|
)
|
|
235,648
|
|
||||
Equity in earnings from real estate ventures
|
—
|
|
|
21,395
|
|
|
—
|
|
|
21,395
|
|
||||
Identifiable assets
|
309,316
|
|
|
558,776
|
|
(4)
|
460,186
|
|
(6)
|
1,328,278
|
|
||||
Depreciation and amortization
|
8,826
|
|
|
8,511
|
|
|
1,277
|
|
|
18,614
|
|
||||
Capital expenditures
|
3,705
|
|
|
16,129
|
|
|
35
|
|
|
19,869
|
|
||||
|
|
|
|
|
|
|
|
(1)
|
Operating income includes $990 of litigation settlement and judgment expense.
|
(2)
|
Operating income includes $6,298 of income from MSA Settlement, and $685 of litigation settlement and judgment expense.
|
(3)
|
Operating income includes $2,721 of income from MSA Settlement, and $6,591 of litigation settlement and judgment expense.
|
(4)
|
Includes real estate investments accounted for under the equity method of accounting of $131,556, $141,105 and $188,131 as of December 31, 2019, 2018 and 2017, respectively.
|
(5)
|
Operating income includes $2,469 of litigation settlement and judgment income.
|
(6)
|
Corporate and Other identifiable assets primarily includes cash of $272,459, investment securities of $129,641, equity securities at fair value that qualify for the NAV practical expedient of $45,781, and equity-method investments of $15,942 as of December 31, 2019. Corporate and other identifiable assets primarily includes cash of $474,974, investment securities of $131,569, equity securities at fair value that qualify for the NAV practical expedient of $54,628, and equity-method investments of $11,631 as of December 31, 2018. 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.
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
||||||||
|
2019
|
|
2019
|
|
2019
|
|
2019
|
||||||||
Revenues
|
$
|
439,565
|
|
|
$
|
504,790
|
|
|
$
|
538,432
|
|
|
$
|
420,924
|
|
Gross Profit
|
137,636
|
|
|
159,334
|
|
|
170,258
|
|
|
134,904
|
|
||||
Operating income
|
45,581
|
|
|
66,720
|
|
|
76,244
|
|
|
42,590
|
|
||||
Net income
|
10,667
|
|
|
36,008
|
|
|
39,307
|
|
|
15,033
|
|
||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
10,706
|
|
|
36,008
|
|
|
39,307
|
|
|
14,953
|
|
||||
Per basic common share(1):
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.06
|
|
|
$
|
0.23
|
|
|
$
|
0.25
|
|
|
$
|
0.09
|
|
Per diluted common share(1):
|
|
|
|
|
|
|
|
||||||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.06
|
|
|
$
|
0.23
|
|
|
$
|
0.25
|
|
|
$
|
0.08
|
|
(1)
|
Per share computations include the impact of a 5% stock dividend paid on September 27, 2019. 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,
|
||||||||
|
2018
|
|
2018
|
|
2018
|
|
2018
|
||||||||
Revenues
|
$
|
445,939
|
|
|
$
|
513,869
|
|
|
$
|
481,488
|
|
|
$
|
428,966
|
|
Gross Profit
|
140,798
|
|
|
153,567
|
|
|
148,722
|
|
|
134,691
|
|
||||
Operating income
|
48,086
|
|
|
66,018
|
|
|
61,861
|
|
|
48,084
|
|
||||
Net income
|
20,319
|
|
|
15,028
|
|
|
18,996
|
|
|
3,664
|
|
||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
21,074
|
|
|
12,002
|
|
|
17,818
|
|
|
7,211
|
|
||||
Per basic common share(1):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.13
|
|
|
$
|
0.07
|
|
|
$
|
0.11
|
|
|
$
|
0.04
|
|
Per diluted common share(1):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income applicable to common shares attributed to Vector Group Ltd.
|
$
|
0.13
|
|
|
$
|
0.07
|
|
|
$
|
0.11
|
|
|
$
|
0.04
|
|
(1)
|
Per share computations include the impact of a 5% stock dividend paid on September 27, 2018. 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, 2019
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
272,282
|
|
|
$
|
27,178
|
|
|
$
|
71,881
|
|
|
$
|
—
|
|
|
$
|
371,341
|
|
Investment securities at fair value
|
129,641
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
129,641
|
|
|||||
Accounts receivable - trade, net
|
—
|
|
|
15,646
|
|
|
21,313
|
|
|
—
|
|
|
36,959
|
|
|||||
Intercompany receivables
|
44,043
|
|
|
—
|
|
|
—
|
|
|
(44,043
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
98,762
|
|
|
—
|
|
|
—
|
|
|
98,762
|
|
|||||
Income taxes receivable, net
|
—
|
|
|
—
|
|
|
95
|
|
|
(95
|
)
|
|
—
|
|
|||||
Other current assets
|
9,159
|
|
|
9,021
|
|
|
26,731
|
|
|
—
|
|
|
44,911
|
|
|||||
Total current assets
|
455,125
|
|
|
150,607
|
|
|
120,020
|
|
|
(44,138
|
)
|
|
681,614
|
|
|||||
Property, plant and equipment, net
|
425
|
|
|
33,816
|
|
|
47,919
|
|
|
—
|
|
|
82,160
|
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
28,317
|
|
|
—
|
|
|
28,317
|
|
|||||
Long-term investments (of which $45,781 were carried at fair value)
|
61,723
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,723
|
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
131,556
|
|
|
—
|
|
|
131,556
|
|
|||||
Operating lease right of use assets
|
7,085
|
|
|
4,830
|
|
|
137,663
|
|
|
—
|
|
|
149,578
|
|
|||||
Investments in consolidated subsidiaries
|
420,353
|
|
|
238,040
|
|
|
—
|
|
|
(658,393
|
)
|
|
—
|
|
|||||
Goodwill and other intangible assets, net
|
—
|
|
|
107,511
|
|
|
158,482
|
|
|
—
|
|
|
265,993
|
|
|||||
Other assets
|
15,080
|
|
|
46,416
|
|
|
42,652
|
|
|
—
|
|
|
104,148
|
|
|||||
Total assets
|
$
|
959,791
|
|
|
$
|
581,220
|
|
|
$
|
666,609
|
|
|
$
|
(702,531
|
)
|
|
$
|
1,505,089
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of notes payable and long-term debt
|
$
|
163,932
|
|
|
$
|
45,210
|
|
|
$
|
10,127
|
|
|
$
|
(10,000
|
)
|
|
$
|
209,269
|
|
Current portion of fair value of derivatives embedded within convertible debt
|
4,999
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,999
|
|
|||||
Intercompany payables
|
—
|
|
|
236
|
|
|
43,807
|
|
|
(44,043
|
)
|
|
—
|
|
|||||
Income taxes payable, net
|
2,398
|
|
|
2,835
|
|
|
—
|
|
|
(95
|
)
|
|
5,138
|
|
|||||
Current payments due under the Master Settlement Agreement
|
—
|
|
|
34,116
|
|
|
—
|
|
|
—
|
|
|
34,116
|
|
|||||
Current operating lease liability
|
508
|
|
|
2,015
|
|
|
15,771
|
|
|
—
|
|
|
18,294
|
|
|||||
Other current liabilities
|
52,065
|
|
|
78,947
|
|
|
59,202
|
|
|
(897
|
)
|
|
189,317
|
|
|||||
Total current liabilities
|
223,902
|
|
|
163,359
|
|
|
128,907
|
|
|
(55,035
|
)
|
|
461,133
|
|
|||||
Notes payable, long-term debt and other obligations, less current portion
|
1,377,108
|
|
|
20,089
|
|
|
20,019
|
|
|
(20,000
|
)
|
|
1,397,216
|
|
|||||
Non-current employee benefits
|
50,806
|
|
|
17,047
|
|
|
—
|
|
|
—
|
|
|
67,853
|
|
|||||
Deferred income taxes, net
|
(14,492
|
)
|
|
22,620
|
|
|
25,567
|
|
|
—
|
|
|
33,695
|
|
|||||
Non-current operating lease liability
|
7,558
|
|
|
3,402
|
|
|
146,003
|
|
|
—
|
|
|
156,963
|
|
|||||
Other liabilities, including litigation accruals and payments due under the Master Settlement Agreement
|
373
|
|
|
41,020
|
|
|
34,999
|
|
|
(3,147
|
)
|
|
73,245
|
|
|||||
Total liabilities
|
1,645,255
|
|
|
267,537
|
|
|
355,495
|
|
|
(78,182
|
)
|
|
2,190,105
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Stockholders' (deficiency) equity attributed to Vector Group Ltd.
|
(685,464
|
)
|
|
313,683
|
|
|
310,666
|
|
|
(624,349
|
)
|
|
(685,464
|
)
|
|||||
Non-controlling interest
|
—
|
|
|
—
|
|
|
448
|
|
|
—
|
|
|
448
|
|
|||||
Total stockholders' (deficiency) equity
|
(685,464
|
)
|
|
313,683
|
|
|
311,114
|
|
|
(624,349
|
)
|
|
(685,016
|
)
|
|||||
Total liabilities and stockholders' deficiency
|
$
|
959,791
|
|
|
$
|
581,220
|
|
|
$
|
666,609
|
|
|
$
|
(702,531
|
)
|
|
$
|
1,505,089
|
|
|
|
|
December 31, 2018
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
474,880
|
|
|
$
|
23,308
|
|
|
$
|
86,393
|
|
|
$
|
—
|
|
|
$
|
584,581
|
|
Investment securities at fair value
|
131,569
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
131,569
|
|
|||||
Accounts receivable - trade, net
|
—
|
|
|
15,440
|
|
|
18,806
|
|
|
—
|
|
|
34,246
|
|
|||||
Intercompany receivables
|
38,391
|
|
|
—
|
|
|
—
|
|
|
(38,391
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
90,997
|
|
|
—
|
|
|
—
|
|
|
90,997
|
|
|||||
Income taxes receivable, net
|
—
|
|
|
—
|
|
|
1,268
|
|
|
(1,268
|
)
|
|
—
|
|
|||||
Other current assets
|
1,500
|
|
|
7,599
|
|
|
21,729
|
|
|
—
|
|
|
30,828
|
|
|||||
Total current assets
|
646,340
|
|
|
137,344
|
|
|
128,196
|
|
|
(39,659
|
)
|
|
872,221
|
|
|||||
Property, plant and equipment, net
|
506
|
|
|
38,562
|
|
|
47,668
|
|
|
—
|
|
|
86,736
|
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
26,220
|
|
|
—
|
|
|
26,220
|
|
|||||
Long-term investments (of which $54,628 were carried at fair value)
|
66,259
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66,259
|
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
141,105
|
|
|
—
|
|
|
141,105
|
|
|||||
Investments in consolidated subsidiaries
|
431,288
|
|
|
252,113
|
|
|
—
|
|
|
(683,401
|
)
|
|
—
|
|
|||||
Goodwill and other intangible assets, net
|
—
|
|
|
107,511
|
|
|
159,100
|
|
|
—
|
|
|
266,611
|
|
|||||
Other assets
|
14,616
|
|
|
38,154
|
|
|
37,582
|
|
|
—
|
|
|
90,352
|
|
|||||
Total assets
|
$
|
1,159,009
|
|
|
$
|
573,684
|
|
|
$
|
539,871
|
|
|
$
|
(723,060
|
)
|
|
$
|
1,549,504
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of notes payable and long-term debt
|
$
|
226,343
|
|
|
$
|
29,480
|
|
|
$
|
311
|
|
|
$
|
—
|
|
|
$
|
256,134
|
|
Current portion of fair value of derivatives embedded within convertible debt
|
6,635
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,635
|
|
|||||
Intercompany payables
|
—
|
|
|
479
|
|
|
37,912
|
|
|
(38,391
|
)
|
|
—
|
|
|||||
Income taxes payable, net
|
5,257
|
|
|
1,263
|
|
|
—
|
|
|
(1,268
|
)
|
|
5,252
|
|
|||||
Current payments due under the Master Settlement Agreement
|
—
|
|
|
36,561
|
|
|
—
|
|
|
—
|
|
|
36,561
|
|
|||||
Other current liabilities
|
55,915
|
|
|
73,279
|
|
|
51,144
|
|
|
—
|
|
|
180,338
|
|
|||||
Total current liabilities
|
294,150
|
|
|
141,062
|
|
|
89,367
|
|
|
(39,659
|
)
|
|
484,920
|
|
|||||
Notes payable, long-term debt and other obligations, less current portion
|
1,354,219
|
|
|
2,349
|
|
|
30,129
|
|
|
—
|
|
|
1,386,697
|
|
|||||
Fair value of derivatives embedded within convertible debt
|
24,789
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,789
|
|
|||||
Non-current employee benefits
|
45,615
|
|
|
15,673
|
|
|
—
|
|
|
—
|
|
|
61,288
|
|
|||||
Deferred income taxes, net
|
(13,084
|
)
|
|
17,732
|
|
|
32,763
|
|
|
—
|
|
|
37,411
|
|
|||||
Other liabilities, including litigation accruals and payments due under the Master Settlement Agreement
|
1,379
|
|
|
38,179
|
|
|
62,207
|
|
|
—
|
|
|
101,765
|
|
|||||
Total liabilities
|
1,707,068
|
|
|
214,995
|
|
|
214,466
|
|
|
(39,659
|
)
|
|
2,096,870
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Stockholders' (deficiency) equity attributed to Vector Group Ltd.
|
(548,059
|
)
|
|
358,689
|
|
|
324,712
|
|
|
(683,401
|
)
|
|
(548,059
|
)
|
|||||
Non-controlling interest
|
—
|
|
|
—
|
|
|
693
|
|
|
—
|
|
|
693
|
|
|||||
Total stockholders' (deficiency) equity
|
(548,059
|
)
|
|
358,689
|
|
|
325,405
|
|
|
(683,401
|
)
|
|
(547,366
|
)
|
|||||
Total liabilities and stockholders' deficiency
|
$
|
1,159,009
|
|
|
$
|
573,684
|
|
|
$
|
539,871
|
|
|
$
|
(723,060
|
)
|
|
$
|
1,549,504
|
|
|
|
|
Year Ended December 31, 2019
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,115,318
|
|
|
$
|
788,871
|
|
|
$
|
(478
|
)
|
|
$
|
1,903,711
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
771,130
|
|
|
530,449
|
|
|
—
|
|
|
1,301,579
|
|
|||||
Operating, selling, administrative and general expenses
|
38,051
|
|
|
71,001
|
|
|
261,433
|
|
|
(478
|
)
|
|
370,007
|
|
|||||
Litigation settlement and judgment expense (income)
|
—
|
|
|
990
|
|
|
—
|
|
|
—
|
|
|
990
|
|
|||||
Management fee expense
|
—
|
|
|
11,971
|
|
|
—
|
|
|
(11,971
|
)
|
|
—
|
|
|||||
Operating (loss) income
|
(38,051
|
)
|
|
260,226
|
|
|
(3,011
|
)
|
|
11,971
|
|
|
231,135
|
|
|||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(134,594
|
)
|
|
(3,838
|
)
|
|
(913
|
)
|
|
897
|
|
|
(138,448
|
)
|
|||||
Change in fair value of derivatives embedded within convertible debt
|
26,425
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,425
|
|
|||||
Loss on extinguishment of debt
|
(4,301
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,301
|
)
|
|||||
Equity in losses from real estate ventures
|
—
|
|
|
—
|
|
|
(19,288
|
)
|
|
—
|
|
|
(19,288
|
)
|
|||||
Equity in earnings in consolidated subsidiaries
|
182,959
|
|
|
6,185
|
|
|
—
|
|
|
(189,144
|
)
|
|
—
|
|
|||||
Management fee income
|
11,971
|
|
|
—
|
|
|
—
|
|
|
(11,971
|
)
|
|
—
|
|
|||||
Other, net
|
30,193
|
|
|
5,340
|
|
|
5,929
|
|
|
(3,157
|
)
|
|
38,305
|
|
|||||
Income (loss) before provision for income taxes
|
74,602
|
|
|
267,913
|
|
|
(17,283
|
)
|
|
(191,404
|
)
|
|
133,828
|
|
|||||
Income tax benefit (expense)
|
26,372
|
|
|
(65,069
|
)
|
|
5,884
|
|
|
—
|
|
|
(32,813
|
)
|
|||||
Net income (loss)
|
100,974
|
|
|
202,844
|
|
|
(11,399
|
)
|
|
(191,404
|
)
|
|
101,015
|
|
|||||
Net income attributed to non-controlling interest
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
(41
|
)
|
|||||
Net income (loss) attributed to Vector Group Ltd.
|
$
|
100,974
|
|
|
$
|
202,844
|
|
|
$
|
(11,440
|
)
|
|
$
|
(191,404
|
)
|
|
$
|
100,974
|
|
Comprehensive income attributed to non-controlling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
Comprehensive income (loss) attributed to Vector Group Ltd.
|
$
|
103,845
|
|
|
$
|
204,269
|
|
|
$
|
(11,440
|
)
|
|
$
|
(192,829
|
)
|
|
$
|
103,845
|
|
|
|
|
Year Ended December 31, 2018
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,111,572
|
|
|
$
|
759,168
|
|
|
$
|
(478
|
)
|
|
$
|
1,870,262
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
—
|
|
|
787,251
|
|
|
505,233
|
|
|
—
|
|
|
1,292,484
|
|
|||||
Operating, selling, administrative and general expenses
|
35,332
|
|
|
66,781
|
|
|
253,878
|
|
|
(478
|
)
|
|
355,513
|
|
|||||
Litigation settlement and judgment expense
|
—
|
|
|
685
|
|
|
(2,469
|
)
|
|
—
|
|
|
(1,784
|
)
|
|||||
Management fee expense
|
—
|
|
|
11,509
|
|
|
—
|
|
|
(11,509
|
)
|
|
—
|
|
|||||
Operating (loss) income
|
(35,332
|
)
|
|
245,346
|
|
|
2,526
|
|
|
11,509
|
|
|
224,049
|
|
|||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(200,916
|
)
|
|
(2,797
|
)
|
|
(67
|
)
|
|
—
|
|
|
(203,780
|
)
|
|||||
Change in fair value of derivatives embedded within convertible debt
|
44,989
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,989
|
|
|||||
Loss on extinguishment of debt
|
(4,066
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,066
|
)
|
|||||
Equity in earnings from real estate ventures
|
—
|
|
|
—
|
|
|
14,446
|
|
|
—
|
|
|
14,446
|
|
|||||
Equity in earnings in consolidated subsidiaries
|
195,582
|
|
|
3,669
|
|
|
—
|
|
|
(199,251
|
)
|
|
—
|
|
|||||
Management fee income
|
11,509
|
|
|
—
|
|
|
—
|
|
|
(11,509
|
)
|
|
—
|
|
|||||
Other, net
|
3,193
|
|
|
(997
|
)
|
|
1,725
|
|
|
—
|
|
|
3,921
|
|
|||||
Income before provision for income taxes
|
14,959
|
|
|
245,221
|
|
|
18,630
|
|
|
(199,251
|
)
|
|
79,559
|
|
|||||
Income tax benefit (expense)
|
43,146
|
|
|
(60,749
|
)
|
|
(3,949
|
)
|
|
—
|
|
|
(21,552
|
)
|
|||||
Net income
|
58,105
|
|
|
184,472
|
|
|
14,681
|
|
|
(199,251
|
)
|
|
58,007
|
|
|||||
Net loss attributed to non-controlling interest
|
—
|
|
|
—
|
|
|
98
|
|
|
—
|
|
|
98
|
|
|||||
Net income attributed to Vector Group Ltd.
|
$
|
58,105
|
|
|
$
|
184,472
|
|
|
$
|
14,779
|
|
|
$
|
(199,251
|
)
|
|
$
|
58,105
|
|
Comprehensive loss attributed to non-controlling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
98
|
|
|
$
|
—
|
|
|
$
|
98
|
|
Comprehensive income attributed to Vector Group Ltd.
|
$
|
56,730
|
|
|
$
|
181,041
|
|
|
$
|
14,779
|
|
|
$
|
(195,820
|
)
|
|
$
|
56,730
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Parent/
Issuer
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Non-
Guarantors
|
|
Consolidating
Adjustments
|
|
Consolidated
Vector Group
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
|
34,790
|
|
|
74,107
|
|
|
228,772
|
|
|
(478
|
)
|
|
337,191
|
|
|||||
Litigation settlement and judgment expense
|
—
|
|
|
6,591
|
|
|
—
|
|
|
—
|
|
|
6,591
|
|
|||||
Management fee expense
|
—
|
|
|
11,069
|
|
|
—
|
|
|
(11,069
|
)
|
|
—
|
|
|||||
Operating (loss) income
|
(34,790
|
)
|
|
238,055
|
|
|
21,314
|
|
|
11,069
|
|
|
235,648
|
|
|||||
Other income (expenses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense
|
(169,910
|
)
|
|
(3,740
|
)
|
|
(35
|
)
|
|
—
|
|
|
(173,685
|
)
|
|||||
Changes 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 earnings in consolidated subsidiaries
|
200,480
|
|
|
15,077
|
|
|
—
|
|
|
(215,557
|
)
|
|
—
|
|
|||||
Management fee income
|
11,069
|
|
|
—
|
|
|
—
|
|
|
(11,069
|
)
|
|
—
|
|
|||||
Other, net
|
576
|
|
|
2,101
|
|
|
1,324
|
|
|
—
|
|
|
4,001
|
|
|||||
Income before provision for income taxes
|
9,234
|
|
|
251,493
|
|
|
43,998
|
|
|
(215,557
|
)
|
|
89,168
|
|
|||||
Income tax benefit (expense)
|
75,338
|
|
|
(73,546
|
)
|
|
(210
|
)
|
|
—
|
|
|
1,582
|
|
|||||
Net income
|
84,572
|
|
|
177,947
|
|
|
43,788
|
|
|
(215,557
|
)
|
|
90,750
|
|
|||||
Net income attributed to non-controlling interest
|
—
|
|
|
—
|
|
|
(6,178
|
)
|
|
—
|
|
|
(6,178
|
)
|
|||||
Net income attributed to Vector Group Ltd.
|
$
|
84,572
|
|
|
$
|
177,947
|
|
|
$
|
37,610
|
|
|
$
|
(215,557
|
)
|
|
$
|
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, 2019
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Net cash provided by operating activities
|
$
|
166,855
|
|
|
$
|
219,173
|
|
|
$
|
6,654
|
|
|
$
|
(268,611
|
)
|
|
$
|
124,071
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sale of investment securities
|
21,879
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,879
|
|
|||||
Maturities of investment securities
|
68,859
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,859
|
|
|||||
Purchase of investment securities
|
(87,766
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(87,766
|
)
|
|||||
Proceeds from sale or liquidation of long-term investments
|
8,256
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,256
|
|
|||||
Purchase of long-term investments
|
(6,556
|
)
|
|
—
|
|
|
(2,667
|
)
|
|
—
|
|
|
(9,223
|
)
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
(52,529
|
)
|
|
—
|
|
|
(52,529
|
)
|
|||||
Distributions from investments in real estate ventures
|
—
|
|
|
—
|
|
|
41,300
|
|
|
—
|
|
|
41,300
|
|
|||||
Increase in cash surrender value of life insurance policies
|
(235
|
)
|
|
(484
|
)
|
|
—
|
|
|
—
|
|
|
(719
|
)
|
|||||
(Increase) decrease in restricted assets
|
(29
|
)
|
|
1,023
|
|
|
—
|
|
|
—
|
|
|
994
|
|
|||||
Investments in subsidiaries
|
(59,467
|
)
|
|
—
|
|
|
—
|
|
|
59,467
|
|
|
—
|
|
|||||
Proceeds from sale of fixed assets
|
—
|
|
|
8
|
|
|
9
|
|
|
—
|
|
|
17
|
|
|||||
Purchase of subsidiaries
|
—
|
|
|
—
|
|
|
(380
|
)
|
|
—
|
|
|
(380
|
)
|
|||||
Capital expenditures
|
(126
|
)
|
|
(4,173
|
)
|
|
(8,276
|
)
|
|
—
|
|
|
(12,575
|
)
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
(2,295
|
)
|
|
—
|
|
|
(2,295
|
)
|
|||||
Pay downs of investment securities
|
1,083
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,083
|
|
|||||
Net cash used in investing activities
|
(54,102
|
)
|
|
(3,626
|
)
|
|
(24,838
|
)
|
|
59,467
|
|
|
(23,099
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of debt
|
230,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230,000
|
|
|||||
Deferred financing costs
|
(9,297
|
)
|
|
(505
|
)
|
|
—
|
|
|
—
|
|
|
(9,802
|
)
|
|||||
Repayments of debt
|
(292,390
|
)
|
|
(820
|
)
|
|
(209
|
)
|
|
—
|
|
|
(293,419
|
)
|
|||||
Borrowings under revolver
|
—
|
|
|
243,688
|
|
|
—
|
|
|
—
|
|
|
243,688
|
|
|||||
Repayments on revolver
|
—
|
|
|
(239,526
|
)
|
|
—
|
|
|
—
|
|
|
(239,526
|
)
|
|||||
Capital contributions received
|
—
|
|
|
1,225
|
|
|
58,242
|
|
|
(59,467
|
)
|
|
—
|
|
|||||
Intercompany dividends paid
|
—
|
|
|
(215,728
|
)
|
|
(52,883
|
)
|
|
268,611
|
|
|
—
|
|
|||||
Dividends and distributions on common stock
|
(238,249
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(238,249
|
)
|
|||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
(286
|
)
|
|
—
|
|
|
(286
|
)
|
|||||
Tax withholdings related to net share settlements of stock option exercise
|
(5,415
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,415
|
)
|
|||||
Other
|
—
|
|
|
—
|
|
|
(216
|
)
|
|
—
|
|
|
(216
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(315,351
|
)
|
|
(211,666
|
)
|
|
4,648
|
|
|
209,144
|
|
|
(313,225
|
)
|
|||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(202,598
|
)
|
|
3,881
|
|
|
(13,536
|
)
|
|
—
|
|
|
(212,253
|
)
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
474,880
|
|
|
23,849
|
|
|
93,000
|
|
|
—
|
|
|
591,729
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
272,282
|
|
|
$
|
27,730
|
|
|
$
|
79,464
|
|
|
$
|
—
|
|
|
$
|
379,476
|
|
|
|
|
Year Ended December 31, 2018
|
|
|
||||||||||||||
|
|
|
|
|
Subsidiary
|
|
|
|
Consolidated
|
||||||||||
|
Parent/
|
|
Subsidiary
|
|
Non-
|
|
Consolidating
|
|
Vector Group
|
||||||||||
|
Issuer
|
|
Guarantors
|
|
Guarantors
|
|
Adjustments
|
|
Ltd.
|
||||||||||
Net cash provided by operating activities
|
$
|
188,568
|
|
|
$
|
204,638
|
|
|
$
|
36,719
|
|
|
$
|
(248,091
|
)
|
|
$
|
181,834
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sale of investment securities
|
14,673
|
|
|
3,955
|
|
|
—
|
|
|
—
|
|
|
18,628
|
|
|||||
Maturities of investment securities
|
24,719
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,719
|
|
|||||
Purchase of investment securities
|
(34,445
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,445
|
)
|
|||||
Proceeds from sale or liquidation of long-term investments
|
19,487
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,487
|
|
|||||
Purchase of long-term investments
|
(415
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(415
|
)
|
|||||
Investments in real estate ventures
|
—
|
|
|
—
|
|
|
(9,728
|
)
|
|
—
|
|
|
(9,728
|
)
|
|||||
Distributions from investments in real estate ventures
|
—
|
|
|
—
|
|
|
54,233
|
|
|
—
|
|
|
54,233
|
|
|||||
Increase in cash surrender value of life insurance policies
|
(280
|
)
|
|
(484
|
)
|
|
—
|
|
|
—
|
|
|
(764
|
)
|
|||||
Decrease in restricted assets
|
6
|
|
|
520
|
|
|
—
|
|
|
—
|
|
|
526
|
|
|||||
Issuance of notes receivable
|
—
|
|
|
—
|
|
|
(450
|
)
|
|
—
|
|
|
(450
|
)
|
|||||
Investments in subsidiaries
|
(17,224
|
)
|
|
—
|
|
|
(10,000
|
)
|
|
27,224
|
|
|
—
|
|
|||||
Proceeds from sale of fixed assets
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||
Cash acquired in purchase of subsidiaries
|
—
|
|
|
—
|
|
|
654
|
|
|
—
|
|
|
654
|
|
|||||
Purchase of subsidiaries
|
—
|
|
|
(10,000
|
)
|
|
(404
|
)
|
|
—
|
|
|
(10,404
|
)
|
|||||
Repayments of notes receivable
|
20,000
|
|
|
—
|
|
|
67
|
|
|
(20,000
|
)
|
|
67
|
|
|||||
Capital expenditures
|
(22
|
)
|
|
(4,599
|
)
|
|
(13,061
|
)
|
|
—
|
|
|
(17,682
|
)
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
(2,583
|
)
|
|
—
|
|
|
(2,583
|
)
|
|||||
Pay downs of investment securities
|
1,611
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,611
|
|
|||||
Net cash provided by (used in) investing activities
|
28,110
|
|
|
(10,599
|
)
|
|
18,728
|
|
|
7,224
|
|
|
43,463
|
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of debt
|
325,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
325,000
|
|
|||||
Deferred financing costs
|
(9,400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,400
|
)
|
|||||
Repayments of debt
|
(26,750
|
)
|
|
(21,631
|
)
|
|
(308
|
)
|
|
20,000
|
|
|
(28,689
|
)
|
|||||
Borrowings under revolver
|
|
|
|
307,023
|
|
|
—
|
|
|
—
|
|
|
307,023
|
|
|||||
Repayments on revolver
|
—
|
|
|
(310,551
|
)
|
|
—
|
|
|
—
|
|
|
(310,551
|
)
|
|||||
Capital contributions received
|
—
|
|
|
10,800
|
|
|
16,424
|
|
|
(27,224
|
)
|
|
—
|
|
|||||
Intercompany dividends paid
|
—
|
|
|
(176,006
|
)
|
|
(72,085
|
)
|
|
248,091
|
|
|
—
|
|
|||||
Dividends and distributions on common stock
|
(225,367
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(225,367
|
)
|
|||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
(2,521
|
)
|
|
—
|
|
|
(2,521
|
)
|
|||||
Net cash provided by (used in) financing activities
|
63,483
|
|
|
(190,365
|
)
|
|
(58,490
|
)
|
|
240,867
|
|
|
55,495
|
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
280,161
|
|
|
3,674
|
|
|
(3,043
|
)
|
|
—
|
|
|
280,792
|
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
194,719
|
|
|
20,175
|
|
|
96,043
|
|
|
—
|
|
|
310,937
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
474,880
|
|
|
$
|
23,849
|
|
|
$
|
93,000
|
|
|
$
|
—
|
|
|
$
|
591,729
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Parent/
Issuer
|
|
Subsidiary
Guarantors
|
|
Subsidiary
Non-
Guarantors
|
|
Consolidating
Adjustments
|
|
Consolidated
Vector Group
Ltd.
|
||||||||||
Net cash provided by operating activities
|
$
|
177,259
|
|
|
$
|
171,122
|
|
|
$
|
59,202
|
|
|
$
|
(275,997
|
)
|
|
$
|
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 investments in real estate ventures
|
—
|
|
|
—
|
|
|
61,718
|
|
|
—
|
|
|
61,718
|
|
|||||
Increase in cash surrender value of life insurance policies
|
(318
|
)
|
|
(484
|
)
|
|
—
|
|
|
—
|
|
|
(802
|
)
|
|||||
Decrease in restricted assets
|
227
|
|
|
1,783
|
|
|
240
|
|
|
—
|
|
|
2,250
|
|
|||||
Issuance of notes receivable
|
(20,000
|
)
|
|
—
|
|
|
(1,633
|
)
|
|
20,000
|
|
|
(1,633
|
)
|
|||||
Proceeds from sale of fixed assets
|
—
|
|
|
76
|
|
|
—
|
|
|
—
|
|
|
76
|
|
|||||
Purchase of subsidiaries
|
—
|
|
|
—
|
|
|
(6,569
|
)
|
|
—
|
|
|
(6,569
|
)
|
|||||
Investments in subsidiaries
|
(38,458
|
)
|
|
—
|
|
|
—
|
|
|
38,458
|
|
|
—
|
|
|||||
Capital expenditures
|
(35
|
)
|
|
(3,705
|
)
|
|
(16,129
|
)
|
|
—
|
|
|
(19,869
|
)
|
|||||
Investments in real estate, net
|
—
|
|
|
—
|
|
|
(619
|
)
|
|
—
|
|
|
(619
|
)
|
|||||
Pay downs of investment securities
|
2,633
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,633
|
|
|||||
Net cash used in investing activities
|
(89,897
|
)
|
|
(2,330
|
)
|
|
(2,193
|
)
|
|
58,458
|
|
|
(35,962
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of debt
|
850,000
|
|
|
20,000
|
|
|
21
|
|
|
(20,000
|
)
|
|
850,021
|
|
|||||
Repayments of debt
|
(835,000
|
)
|
|
(1,882
|
)
|
|
(323
|
)
|
|
—
|
|
|
(837,205
|
)
|
|||||
Deferred financing costs
|
(19,200
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,200
|
)
|
|||||
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
|
—
|
|
|
(182,975
|
)
|
|
(93,022
|
)
|
|
275,997
|
|
|
—
|
|
|||||
Dividends and distributions on common stock
|
(211,488
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(211,488
|
)
|
|||||
Distributions to non-controlling interest
|
—
|
|
|
—
|
|
|
(2,779
|
)
|
|
—
|
|
|
(2,779
|
)
|
|||||
Proceeds from exercise of Vector options
|
43,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,230
|
|
|||||
Net cash used in financing activities
|
(172,458
|
)
|
|
(168,301
|
)
|
|
(60,045
|
)
|
|
217,539
|
|
|
(183,265
|
)
|
|||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(85,096
|
)
|
|
491
|
|
|
(3,036
|
)
|
|
—
|
|
|
(87,641
|
)
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
279,815
|
|
|
19,684
|
|
|
99,079
|
|
|
—
|
|
|
398,578
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
194,719
|
|
|
$
|
20,175
|
|
|
$
|
96,043
|
|
|
$
|
—
|
|
|
$
|
310,937
|
|
Description
|
|
Balance at
Beginning
of Period
|
|
Additions
Charged to
Costs and
Expenses
|
|
Deductions
|
|
Balance
at End
of Period
|
||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowances for:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Doubtful accounts
|
|
$
|
449
|
|
|
$
|
246
|
|
|
$
|
21
|
|
|
$
|
674
|
|
Cash discounts
|
|
317
|
|
|
25,970
|
|
|
25,968
|
|
|
319
|
|
||||
Deferred tax valuation allowance
|
|
3,817
|
|
|
—
|
|
|
2,525
|
|
|
1,292
|
|
||||
Sales returns
|
|
6,935
|
|
|
4,068
|
|
|
3,218
|
|
|
7,785
|
|
||||
Total
|
|
$
|
11,518
|
|
|
$
|
30,284
|
|
|
$
|
31,732
|
|
|
$
|
10,070
|
|
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowances for:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Doubtful accounts
|
|
$
|
33
|
|
|
$
|
429
|
|
|
$
|
13
|
|
|
$
|
449
|
|
Cash discounts
|
|
365
|
|
|
28,154
|
|
|
28,202
|
|
|
317
|
|
||||
Deferred tax valuation allowance
|
|
3,664
|
|
|
153
|
|
|
—
|
|
|
3,817
|
|
||||
Sales returns
|
|
5,632
|
|
|
4,700
|
|
(1)
|
3,397
|
|
|
6,935
|
|
||||
Total
|
|
$
|
9,694
|
|
|
$
|
33,436
|
|
|
$
|
31,612
|
|
|
$
|
11,518
|
|
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
|
|
•
|
prior to such date, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
|
•
|
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding specified shares; or
|
•
|
at or subsequent to such date of the transaction that resulted in a person or entity becoming an interested stockholder, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.
|
•
|
any merger or consolidation involving the corporation and the interested stockholder;
|
•
|
any sale, lease, exchange, mortgage, pledge, transfer or other disposition of 10% or more of the assets of the corporation to or with the interested stockholder;
|
•
|
subject to certain exceptions, any transaction which results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
|
•
|
any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or
|
•
|
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
|
•
|
the owner of 15% or more of the outstanding voting stock of the corporation;
|
•
|
an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within three years immediately prior to the relevant date; or
|
•
|
an affiliate or associate of the above.
|
VGR Holding LLC
|
Delaware
|
Liggett Group LLC
|
Delaware
|
Vector Tobacco Inc.
|
Virginia
|
New Valley LLC
|
Delaware
|
NV 76 Eleventh LLC
|
Delaware
|
DER Holdings LLC
|
Delaware
|
Douglas Elliman Realty, LLC
|
New York
|
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 2, 2020
|
|
|
|
|
|
|
/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:
|
March 2, 2020
|
|
|
|
|
|
|
/s/ J. Bryant Kirkland III
|
|
|
J. Bryant Kirkland III
|
|
|
Senior Vice President, Treasurer and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
March 2, 2020
|
|
|
|
|
|
|
/s/ Howard M. Lorber
|
|
|
Howard M. Lorber
|
|
|
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
March 2, 2020
|
|
|
|
|
|
|
/s/ J. Bryant Kirkland III
|
|
|
J. Bryant Kirkland III
|
|
|
Senior Vice President, Treasurer and Chief Financial Officer
|
(i)
|
Engle Progeny Cases with trial dates through December 31, 2020.
|
(ii)
|
Post-Trial Engle Progeny Cases.
|