Market Overview

Vector Group Reports Second Quarter 2018 Financial Results

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Vector Group Ltd. (NYSE:VGR) today announced financial results for the
three and six months ended June 30, 2018.

GAAP Financial Results

Second quarter of 2018 revenues were $481.5 million, compared to
revenues of $472.0 million in the second quarter of 2017. The Company
recorded operating income of $61.9 million in the second quarter of
2018, compared to operating income of $74.3 million in the second
quarter of 2017. Net income attributed to Vector Group Ltd. for the
second quarter of 2018 was $17.8 million, or $0.12 per diluted common
share, compared to net income of $26.8 million, or $0.19 per diluted
common share, in the second quarter of 2017.

For the six months ended June 30, 2018 revenues were $910.5 million,
compared to revenues of $887.2 million for the six months ended June 30,
2017. The Company recorded operating income of $109.9 million for the
six months ended June 30, 2018, compared to operating income of $127.7
million for the six months ended June 30, 2017. Net income attributed to
Vector Group Ltd. for the six months ended June 30, 2018 was $25.0
million, or $0.16 per diluted common share, compared to a net income of
$22.6 million, or $0.15 per diluted common share, for the six months
ended June 30, 2017.

Adoption of accounting standards. Effective January 1, 2018, the
Company has adopted several new accounting standards that impact
financial reporting for the three and six months ended June 30, 2018.
The new standards were Accounting Standards Updates ("ASU") 2014-09
(Topic 606), and 2016-08, which relate to revenue recognition; ASU
2016-01 and ASU 2018-03, which relate to the Company's investments in
equity securities; and 2017-07, which relates to accounting for the
Company's defined benefit pension plans. The adoption of ASU 2017-07 was
retrospective and certain categories in the Company's Statement of
Operations were revised, including operating, selling, administrative
and general expenses, operating income and other income; therefore these
financial metrics, as well as non-GAAP financial measures, Adjusted
EBITDA, Adjusted Operating Income, and Adjusted Operating Income for the
Tobacco Segment, for the last twelve months ended June 30, 2018 and the
three and six months ended June 30, 2017 contained in this press release
do not agree with the Company's previously issued earnings press
releases (August 8, 2017 and March 1, 2018). The impact of the adoption
of ASU 2017-07 on selling, general, and administrative expense,
operating income, other income and Adjusted EBITDA was reported in the
Company's Form 8-K dated June 14, 2018. In addition, ASU 2014-09
(Topic 606), ASU 2016-08, ASU 2016-01 and ASU 2018-03 were applied using
the modified retrospective method and resulted in a cumulative
adjustment to beginning stockholder's deficiency at January 1, 2018. The
Company's Statement of Operations for the periods ending prior to
January 1, 2018, including the three months ended March 31, 2017, June
30, 2017, September 30, 2017 and December 31, 2017 have not been
adjusted to reflect the adoption of these standards, which results in
limited comparability between 2018 and 2017 operating results.

Segment changes. As a result of a significant reduction in the
Company's E-Cigarette business, results from the E-Cigarette segment are
now included in the Corporate and Other Segment and 2017 information has
been recast to conform to the 2018 presentation.

Non-GAAP Financial Measures

Non-GAAP financial measures also include adjustments for purchase
accounting associated with the Company's 2013 acquisition of an
additional 20.59% interest in Douglas Elliman Realty, LLC, litigation
related expenses and awards, settlements of long-standing disputes
related to the Master Settlement Agreement in the Tobacco segment,
restructuring and pension settlement expense in the Tobacco segment,
stock-based compensation expense (for purposes of Adjusted EBITDA only)
and non-cash interest expense associated with the Company's convertible
debt. Reconciliations of non-GAAP financial results to the comparable
GAAP financial results for the three and six months ended June 30, 2018
and 2017 are included in Tables 2 through 7.

Three months ended June 30, 2018 compared to the three months ended
June 30, 2017

Second quarter of 2018 Adjusted EBITDA attributed to Vector Group (as
described in Table 2 attached hereto) were $65.1 million compared to
$76.8 million for the second quarter of 2017.

Adjusted Net Income (as described in Table 3 attached hereto) was $26.4
million or $0.19 per diluted share for the second quarter of 2018 and
$32.7 million or $0.24 per diluted share for the second quarter of 2017.

Adjusted Operating Income (as described in Table 4 attached hereto) was
$60.0 million for the second quarter of 2018 compared to $74.8 million
for the second quarter of 2017.

Six months ended June 30, 2018 compared to the six months ended
June 30, 2017

Adjusted EBITDA attributed to Vector Group Ltd. (as described in Table 2
attached hereto) were $118.0 million for the six months ended June 30,
2018 compared to $138.6 million for the six months ended June 30, 2017.

Adjusted Net Income (as described in Table 3 attached hereto) was $34.4
million or $0.23 per diluted share for the six months ended June 30,
2018 and $51.2 million or $0.36 per diluted share for the six months
ended June 30, 2017.

Adjusted Operating Income (as described in Table 4 attached hereto) was
$102.5 million for the six months ended June 30, 2018 compared to $129.3
million for the six months ended June 30, 2017.

Tobacco Segment Financial Results

For the second quarter of 2018, the Tobacco segment had revenues of
$274.8 million, compared to $272.2 million for the second quarter of
2017.

For the six months ended June 30, 2018, the Tobacco segment had revenues
of $541.9 million, compared to $529.6 million for the six months ended
June 30, 2017. The increase in revenues was primarily due to a 1.7%
increase in unit sales volume.

Operating Income from the Tobacco segment was $62.5 million and $125.9
million for the three and six months ended June 30, 2018 compared to
$64.3 million and $123.9 million for the three and six months ended June
30, 2017, respectively.

Non-GAAP Financial Measures

Tobacco Adjusted Operating Income (as described in Table 5 attached
hereto) for the second quarter of 2018 and 2017 was $60.2 million and
$64.4 million, respectively. Tobacco Adjusted Operating Income for the
six months ended June 30, 2018 and 2017 was $120.2 million and $124.7
million, respectively.

For the second quarter of 2018, the Tobacco segment had conventional
cigarette (wholesale) shipments of approximately 2.30 billion units
compared to 2.29 billion units for the second quarter of 2017. For the
six months ended June 30, 2018, the Tobacco segment had conventional
cigarette (wholesale) shipments of approximately 4.54 billion units
compared to 4.46 billion units for the six months ended June 30, 2017.

Liggett's retail market share increased to 4.1% for both the second
quarter of 2018 and for the six months ended June 30, 2018 compared to
3.8% for the comparable 2017 periods. Compared to the second quarter of
2017, Liggett's retail shipments increased 4.3% while the overall
industry's retail shipments declined by 2.7%. Compared to the six months
ended June 30, 2017, Liggett's retail shipments increased 2.4% while the
overall industry's retail shipments declined by 4.7%, according to data
from Management Science Associates, Inc.

Real Estate Segment Financial Results

For the second quarter of 2018, the Real Estate segment had revenues of
$206.7 million, compared to $199.8 million for the second quarter of
2017. For the six months ended June 30, 2018, the Real Estate segment
had revenues of $368.5 million, compared to $357.6 million for the six
months ended June 30, 2017. For the second quarter of 2018, the Real
Estate segment reported net income of $2.9 million, compared to a net
income of $16.0 million for the second quarter of 2017. For the six
months ended June 30, 2018, the Real Estate segment reported a net loss
of $5.6 million, compared to net income of $23.1 million for the six
months ended June 30, 2017.

Douglas Elliman's results are included in Vector Group Ltd.'s Real
Estate segment. For the second quarter of 2018, Douglas Elliman had
revenues of $205.6 million, compared to $198.7 million for the second
quarter of 2017. For the six months ended June 30, 2018, Douglas Elliman
had revenues of $365.0 million, compared to $354.2 million for the six
months ended June 30, 2017. For the second quarter of 2018, Douglas
Elliman reported net income of $5.9 million, compared to a net income of
$16.1 million for the second quarter of 2017. For the six months ended
June 30, 2018, Douglas Elliman reported a net loss of $2.2 million,
compared to net income of $16.3 million for the six months ended June
30, 2017.

Non-GAAP Financial Measures

For the second quarter of 2018, Real Estate Adjusted EBITDA attributed
to the Company (as described in Table 6 attached hereto) were $5.8
million, compared to $13.3 million for the second quarter of 2017.

For the six months ended June 30, 2018, Real Estate Adjusted EBITDA
attributed to the Company were $0.7 million, compared to $15.8 million
for the six months ended June 30, 2017.

Douglas Elliman's results are included in Vector Group Ltd.'s Real
Estate segment. For the second quarter of 2018, Douglas Elliman's
Adjusted EBITDA (as described in Table 7 attached hereto) were $8.4
million ($5.9 million attributed to the Company), compared to $18.2
million ($12.9 million attributed to the Company) for the second quarter
of 2017.

For the six months ended June 30, 2018, Douglas Elliman's Adjusted
EBITDA were negative $0.2 million (negative $0.2 million attributed to
the Company), compared to $20.0 million ($14.1 million attributed to the
Company) for the six months ended June 30, 2017.

For the three and six months ended June 30, 2018, Douglas Elliman
achieved closed sales of approximately $7.5 billion and $13.6 billion,
compared to $7.2 billion and $12.7 billion for the three and six months
ended June 30, 2017.

Non-GAAP Financial Measures

Adjusted EBITDA, Adjusted Net Income, Adjusted Operating Income, Tobacco
Adjusted Operating Income, New Valley LLC Adjusted EBITDA and Douglas
Elliman Realty, LLC Adjusted EBITDA ("the Non-GAAP Financial Measures")
are financial measures not prepared in accordance with generally
accepted accounting principles ("GAAP"). The Company believes that the
Non-GAAP Financial Measures are important measures that supplement
discussions and analysis of its results of operations and enhances an
understanding of its operating performance. The Company believes the
Non-GAAP Financial Measures provide investors and analysts with a useful
measure of operating results unaffected by differences in capital
structures and ages of related assets among otherwise comparable
companies.

Management uses the Non-GAAP Financial Measures as measures to review
and assess operating performance of the Company's business, and
management and investors should review both the overall performance
(GAAP net income) and the operating performance (the Non-GAAP Financial
Measures) of the Company's business. While management considers the
Non-GAAP Financial Measures to be important, they should be considered
in addition to, but not as substitutes for or superior to, other
measures of financial performance prepared in accordance with GAAP, such
as operating income, net income and cash flows from operations. In
addition, the Non-GAAP Financial Measures are susceptible to varying
calculations and the Company's measurement of the Non-GAAP Financial
Measures may not be comparable to those of other companies. Attached
hereto as Tables 2 through 7 is information relating to the Company's
Non-GAAP Financial Measures for the three and six months ended June 30,
2018 and 2017.

Conference Call to Discuss Second Quarter 2018 Results

As previously announced, the Company will host a conference call and
webcast on Tuesday, August 7, 2018 at 8:30 AM (ET) to discuss second
quarter 2018 results. Investors can access the call by
dialing 800-859-8150 and entering 27981475 as the conference ID number.
The call will also be available via live webcast at www.investorcalendar.com.
Webcast participants should allot extra time to register before the
webcast begins.

A replay of the call will be available shortly after the call ends
on August 7, 2018 through August 21, 2018. To access the replay,
dial 877-656-8905 and enter 27981475 as the conference ID number. The
archived webcast will also be available at www.investorcalendar.com for
one year.

Vector Group is a holding company that indirectly owns Liggett Group LLC
and Vector Tobacco Inc. and directly owns New Valley LLC, which owns a
controlling interest in Douglas Elliman Realty, LLC. Additional
information concerning the company is available on the Company's
website, www.VectorGroupLtd.com.

[Financial Tables Follow]

 

TABLE 1

VECTOR GROUP LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share
Amounts
)

 

 
  Three Months Ended   Six Months Ended
June 30, June 30,
2018   2017 2018   2017
(Unaudited) (Unaudited)
Revenues:
Tobacco* $ 274,833 $ 272,177 $ 541,949 $ 529,631
Real estate 206,655   199,812   368,505   357,566  
Total revenues 481,488 471,989 910,454 887,197
 
Expenses:
Cost of sales:
Tobacco* 192,761 186,907 377,723 362,661
Real estate 140,005   127,987   249,318   228,156  
Total cost of sales 332,766 314,894 627,041 590,817
 
Operating, selling, administrative and general expenses 86,336 82,693 175,412 166,972
Litigation settlement and judgment expense (income) 525   102   (1,944 ) 1,687  
Operating income 61,861 74,300 109,945 127,721
 
Other income (expenses):
Interest expense (48,421 ) (46,691 ) (94,368 ) (92,912 )
Loss on extinguishment of debt (34,110 )
Change in fair value of derivatives embedded within convertible debt 10,717 8,134 21,284 16,705
Equity in (losses) earnings from real estate ventures (2,112 ) 15,291 (8,672 ) 26,404
Equity in earnings (losses) from investments 4,813 (1,459 ) 5,975 (2,520 )
Net gain recognized on equity securities 3,236 491
Other, net 1,662   798   2,713   2,078  
Income before provision for income taxes 31,756 50,373 37,368 43,366
Income tax expense 12,760   18,827   14,708   16,045  
 
Net income 18,996 31,546 22,660 27,321
 
Net (income) loss attributed to non-controlling interest (1,178 ) (4,735 ) 2,369   (4,737 )
 
Net income attributed to Vector Group Ltd. $ 17,818   $ 26,811   $ 25,029   $ 22,584  
 
Per basic common share:
 
Net income applicable to common share attributed to Vector Group Ltd. $ 0.12   $ 0.19   $ 0.16   $ 0.15  
 
Per diluted common share:
 
Net income applicable to common share attributed to Vector Group Ltd. $ 0.12   $ 0.19   $ 0.16   $ 0.15  
 
Dividends declared per share $ 0.40   $ 0.38   $ 0.80   $ 0.76  
 
    *   Revenues and cost of sales include federal excise taxes of $115,970,
$115,194, $228,771 and $224,562, respectively.
 
 

TABLE 2

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED EBITDA

(Unaudited)

(Dollars in Thousands)

 
 
  LTM   Three Months Ended   Six Months Ended
June 30, June 30, June 30,
2018 2018   2017 2018   2017
 
Net income attributed to Vector Group Ltd. $ 87,017 $ 17,818 $ 26,811 $ 25,029 $ 22,584
Interest expense 175,141 48,421 46,691 94,368 92,912
Income tax (benefit) expense (2,919 ) 12,760 18,827 14,708 16,045
Net (loss) income attributed to non-controlling interest (928 ) 1,178 4,735 (2,369 ) 4,737
Depreciation and amortization 18,308   4,749   4,613   9,336   9,642  
EBITDA $ 276,619 $ 84,926 $ 101,677 $ 141,072 $ 145,920
Change in fair value of derivatives embedded within convertible debt
(a)
(40,498 ) (10,717 ) (8,134 ) (21,284 ) (16,705 )
Equity in (earnings) losses from investments (b) (7,730 ) (4,813 ) 1,459 (5,975 ) 2,520
Net gain recognized on equity securities (491 ) (3,236 ) (491 )
Equity in losses (earnings) from real estate ventures (c) 13,681 2,112 (15,291 ) 8,672 (26,404 )
Loss on extinguishment of debt 34,110
Stock-based compensation expense (d) 9,701 2,456 3,020 4,840 6,026
Litigation settlement and judgment expense (income) (e) 2,960 525 102 (1,944 ) 1,687
Impact of MSA settlement (f) (8,124 ) (2,808 ) (6,298 ) (895 )
Purchase accounting adjustments (g) (1,998 ) 179 144 361 257
Other, net (5,401 ) (1,662 ) (798 ) (2,713 ) (2,078 )
Adjusted EBITDA $ 238,719 $ 66,962 $ 82,179 $ 116,240 $ 144,438
Adjusted EBITDA attributed to non-controlling interest 46   (1,906 ) (5,347 ) 1,790   (5,832 )
Adjusted EBITDA attributed to Vector Group Ltd. $ 238,765   $ 65,056   $ 76,832   $ 118,030   $ 138,606  
 
Adjusted EBITDA by Segment
Tobacco $ 247,976 $ 62,328 $ 66,737 $ 124,307 $ 129,512
Real Estate (h) 5,956 8,464 18,643 (294 ) 21,598
Corporate and Other (15,213 ) (3,830 ) (3,201 ) (7,773 ) (6,672 )
Total $ 238,719   $ 66,962   $ 82,179   $ 116,240   $ 144,438  
 
Adjusted EBITDA Attributed to Vector Group Ltd. by Segment
Tobacco $ 247,976 $ 62,328 $ 66,737 $ 124,307 $ 129,512
Real Estate (i) 6,002 6,558 13,296 1,496 15,766
Corporate and Other (15,213 ) (3,830 ) (3,201 ) (7,773 ) (6,672 )
Total $ 238,765   $ 65,056   $ 76,832   $ 118,030   $ 138,606  
 
    a.   Represents income recognized from changes in the fair value of the
derivatives embedded in the Company's convertible debt.
b. Represents equity in (earnings) losses recognized from investments
that the Company accounts for under the equity method.
c. Represents equity in losses (earnings) recognized from the Company's
investment in certain real estate businesses that are not
consolidated in its financial results.
d. Represents amortization of stock-based compensation.
e. Represents accruals for settlements of judgment expenses in the
Engle progeny tobacco litigation and proceeds received from a
litigation award at Douglas Elliman Realty, LLC.
f. Represents the Company's tobacco segment's settlement of a
long-standing dispute related to the Master Settlement Agreement.
g. Amounts represent purchase accounting adjustments recorded in the
periods presented in connection with the increase of the Company's
ownership of Douglas Elliman Realty, LLC, which occurred in 2013.
h. Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of $5,905
for the last twelve months ended June 30, 2018 and $8,379, $18,225,
negative $224 and $19,981 for the three and six months ended June
30, 2018 and 2017, respectively. Amounts reported in this footnote
reflect 100% of Douglas Elliman Realty, LLC's entire Adjusted EBITDA.
i. Includes Adjusted EBITDA for Douglas Elliman Realty, LLC less
non-controlling interest of $4,169 for the last twelve months ended
June 30, 2018 and $5,915, $12,865, negative $158 and $14,105 for the
three and six months ended June 30, 2018 and 2017, respectively.
Amounts reported in this footnote have adjusted Douglas Elliman
Realty, LLC's Adjusted EBITDA for non-controlling interest.
 
 

TABLE 3

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED NET INCOME

(Unaudited)

(Dollars in Thousands, Except Per Share
Amounts
)

 
 
  Three Months Ended   Six Months Ended
June 30, June 30,
2018   2017 2018   2017
 
Net income attributed to Vector Group Ltd. $ 17,818 $ 26,811 $ 25,029 $ 22,584
 
Change in fair value of derivatives embedded within convertible debt (10,717 ) (8,134 ) (21,284 ) (16,705 )
Non-cash amortization of debt discount on convertible debt 20,386 13,426 38,579 25,479
Loss on extinguishment of debt 34,110
Litigation settlement and judgment expense, net (a) 525 102 (1,218 ) 1,687
Impact of MSA settlement (b) (2,808 ) (6,298 ) (895 )
Impact of interest expense capitalized to real estate ventures 4,324 4,212 2,371 3,767
Douglas Elliman Realty, LLC purchase accounting adjustments (c) 268   251   533   572  
Total adjustments 11,978 9,857 12,683 48,015
 
Tax expense related to adjustments (3,351 ) (3,944 ) (3,339 ) (19,436 )
       
Adjusted Net Income attributed to Vector Group Ltd. $ 26,445   $ 32,724   $ 34,373   $ 51,163  
 
Per diluted common share:
 
Adjusted Net Income applicable to common shares attributed to Vector
Group Ltd.
$ 0.19   $ 0.24   $ 0.23   $ 0.36  
 
    a.   Represents accruals for settlements of judgment expenses in the
Engle progeny tobacco litigation and proceeds received from a
litigation award at Douglas Elliman Realty, LLC, net of
non-controlling interest.
b. Represents the Company's tobacco segment's settlement of a
long-standing dispute related to the Master Settlement Agreement.
c. Represents 70.59% of purchase accounting adjustments in the periods
presented for assets acquired in connection with the increase of the
Company's ownership of Douglas Elliman Realty, LLC, which occurred
in 2013.
 
 

TABLE 4

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED OPERATING INCOME

(Unaudited)

(Dollars in Thousands)

 
 
  LTM   Three Months Ended   Six Months Ended
June 30, June 30, June 30,
2018 2018   2017 2018   2017
 
Operating income $ 217,872 $ 61,861 $ 74,300 $ 109,945 $ 127,721
 
Litigation settlement and judgment expense (income) (a) 2,960 525 102 (1,944 ) 1,687
Impact of MSA settlement (b) (8,124 ) (2,808 ) (6,298 ) (895 )
Douglas Elliman Realty, LLC purchase accounting adjustments (c) (1,188 ) 380   355   755   810  
Total adjustments (6,352 ) (1,903 ) 457 (7,487 ) 1,602
 
Adjusted Operating Income (d) $ 211,520   $ 59,958   $ 74,757   $ 102,458   $ 129,323  
 
    a.   Represents accruals for settlements of judgment expenses in the
Engle progeny tobacco litigation and proceeds received from a
litigation award at Douglas Elliman Realty, LLC.
b. Represents the Company's tobacco segment's settlement of a
long-standing dispute related to the Master Settlement Agreement.
c. Amounts represent purchase accounting adjustments recorded in the
periods presented in connection with the increase of the Company's
ownership of Douglas Elliman Realty, LLC, which occurred in 2013.
d. Does not include a reduction for 29.41% non-controlling interest in
Douglas Elliman Realty, LLC.
 
 

TABLE 5

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF TOBACCO ADJUSTED OPERATING INCOME

AND TOBACCO ADJUSTED EBITDA

(Unaudited)

(Dollars in Thousands)

 
 
  LTM   Three Months Ended   Six Months Ended
June 30, June 30, June 30,
2018 2018   2017 2018   2017
 
Tobacco Adjusted Operating Income:
Operating income from tobacco segment $ 242,401 $ 62,515 $ 64,281 $ 125,926 $ 123,925
 
Litigation settlement and judgment expense (a) 5,429 525 102 525 1,687
Impact of MSA settlement (b) (8,124 ) (2,808 )   (6,298 ) (895 )
Total adjustments (2,695 ) (2,283 ) 102 (5,773 ) 792
 
Tobacco Adjusted Operating Income $ 239,706   $ 60,232   $ 64,383   $ 120,153   $ 124,717  
  LTM   Three Months Ended   Six Months Ended
June 30, June 30, June 30,
2018 2018   2017 2018   2017
 
Tobacco Adjusted EBITDA:
Operating income from tobacco segment $ 242,401 $ 62,515 $ 64,281 $ 125,926 $ 123,925
 
Litigation settlement and judgment expense (a) 5,429 525 102 525 1,687
Impact of MSA settlement (b) (8,124 ) (2,808 )   (6,298 ) (895 )
Total adjustments (2,695 ) (2,283 ) 102 (5,773 ) 792
 
Tobacco Adjusted Operating Income 239,706 60,232 64,383 120,153 124,717
 
Depreciation and amortization 8,185 2,075 2,333 4,112 4,753
Stock-based compensation expense 85   21   21   42   42  
Total adjustments 8,270 2,096 2,354 4,154 4,795
 
Tobacco Adjusted EBITDA $ 247,976   $ 62,328   $ 66,737   $ 124,307   $ 129,512  
 
    a.   Represents accruals for settlements of judgment expenses in the
Engle progeny tobacco litigation.
b. Represents the Company's tobacco segment's settlement of a
long-standing dispute related to the Master Settlement Agreement.
 
 

TABLE 6

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF REAL ESTATE SEGMENT (NEW VALLEY LLC) ADJUSTED
EBITDA

(Unaudited)

(Dollars in Thousands)

 
 
  LTM   Three Months Ended   Six Months Ended
June 30, June 30, June 30,
2018 2018   2017 2018   2017
 
Net income (loss) attributed to Vector Group Ltd. from subsidiary
non-guarantors (a)
$ 8,857 $ 2,926   $ 16,030 $ (5,618 )   $ 23,135
Interest expense (a) 79 7 6 56 12
Income tax (benefit) expense (a) (19,907 ) (803 ) 11,367 (3,797 ) 16,320
Net (loss) income attributed to non-controlling interest (a) (928 ) 1,178 4,735 (2,369 ) 4,737
Depreciation and amortization 9,083   2,418   1,913   4,707   4,135  
EBITDA $ (2,816 ) $ 5,726 $ 34,051 $ (7,021 ) $ 48,339
Loss from non-guarantors other than New Valley LLC 73 19 37 53 83
Equity in losses (earnings) from real estate ventures (b) 13,681 2,112 (15,291 ) 8,672 (26,404 )
Purchase accounting adjustments (c) (1,998 ) 179 144 361 257
Litigation settlement and judgment income (d) (2,469 ) (2,469 )
Other, net (1,321 ) (336 ) (302 ) (678 ) (681 )
Adjusted EBITDA $ 5,150 $ 7,700 $ 18,639 $ (1,082 ) $ 21,594
Adjusted EBITDA attributed to non-controlling interest 47   (1,906 ) (5,347 ) 1,790   (5,832 )
Adjusted EBITDA attributed to New Valley LLC $ 5,197   $ 5,794   $ 13,292   $ 708   $ 15,762  
 
Adjusted EBITDA by Segment
Real Estate (e) $ 5,956 $ 8,464 $ 18,643 $ (294 ) $ 21,598
Corporate and Other (806 ) (764 ) (4 ) (788 ) (4 )
Total (g) $ 5,150   $ 7,700   $ 18,639   $ (1,082 ) $ 21,594  
 
Adjusted EBITDA Attributed to New Valley LLC by Segment
Real Estate (f) $ 6,003 $ 6,558 $ 13,296 $ 1,496 $ 15,766
Corporate and Other (806 ) (764 ) (4 ) (788 ) (4 )
Total (g) $ 5,197   $ 5,794   $ 13,292   $ 708   $ 15,762  
 
    a.   Amounts are derived from Vector Group Ltd.'s Condensed Consolidated
Financial Statements. See Note entitled "Condensed Consolidating
Financial Information" contained in Vector Group Ltd.'s Form 10-Q
for the three and six months ended June 30, 2018.
b. Represents equity in losses (earnings) recognized from the Company's
investment in certain real estate businesses that are not
consolidated in its financial results.
c. Amounts represent purchase accounting adjustments recorded in the
periods presented in connection with the increase of the Company's
ownership of Douglas Elliman Realty, LLC, which occurred in 2013.
d. Represents proceeds received from a litigation award at Douglas
Elliman Realty, LLC.
e. Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of $5,905
for the last twelve months ended June 30, 2018 and $8,379, $18,225,
negative $224 and $19,981 for the three and six months ended June
30, 2018 and 2017, respectively. Amounts reported in this footnote
reflect 100% of Douglas Elliman Realty, LLC's entire Adjusted EBITDA.
f. Includes Adjusted EBITDA for Douglas Elliman Realty, LLC less
non-controlling interest of $4,169 for the last twelve months ended
June 30, 2018 and $5,915, $12,865, negative $158 and $14,105 for the
three and six months ended June 30, 2018 and 2017, respectively.
Amounts reported in this footnote have adjusted Douglas Elliman
Realty, LLC's Adjusted EBITDA for non-controlling interest.
g. New Valley's Adjusted EBITDA does not include an allocation of
Vector Group Ltd.'s "Corporate and Other" segment's expenses (for
purposes of computing Adjusted EBITDA contained in Table 2 of this
press release) of $15,213 for the last twelve months ended June 30,
2018 and $3,830, $3,201, $7,773 and $6,672 for the three and six
months ended June 30, 2018 and 2017, respectively.
 
 
TABLE 7
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF DOUGLAS ELLIMAN REALTY, LLC ADJUSTED EBITDA
AND DOUGLAS ELLIMAN REALTY, LLC ADJUSTED EBITDA ATTRIBUTED TO
REAL ESTATE SEGMENT
(Unaudited)

(Dollars in Thousands)

 

 
  LTM   Three Months Ended   Six Months Ended
June 30, June 30, June 30,
2018 2018   2017 2018   2017
 
Net income (loss) attributed to Douglas Elliman Realty, LLC $ 2,912 $ 5,905 $ 16,141 $ (2,192 )   $ 16,254
Interest expense 61 3 48
Income tax expense 39 266 370 486 400
Depreciation and amortization 8,677   2,315   1,813   4,502   3,933  
Douglas Elliman Realty, LLC EBITDA $ 11,689 $ 8,489 $ 18,324 $ 2,844 $ 20,587
Equity in earnings from real estate ventures (a) (1,170 ) (252 ) (265 ) (877 ) (845 )
Purchase accounting adjustments (b) (1,998 ) 179 144 361 257
Litigation settlement and judgment income (c) (2,469 ) (2,469 )
Other, net (147 ) (37 ) 22   (83 ) (18 )
Douglas Elliman Realty, LLC Adjusted EBITDA $ 5,905 $ 8,379 $ 18,225 $ (224 ) $ 19,981
Douglas Elliman Realty, LLC Adjusted EBITDA attributed to
non-controlling interest
(1,736 ) (2,464 ) (5,360 ) 66   (5,876 )
Douglas Elliman Realty, LLC Adjusted EBITDA attributed to Real
Estate Segment
$ 4,169   $ 5,915   $ 12,865   $ (158 ) $ 14,105  
 
    a.   Represents equity in earnings recognized from the Company's
investment in certain real estate businesses that are not
consolidated in its financial results.
b. Represent purchase accounting adjustments recorded in the periods
presented in connection with the increase of the Company's ownership
of Douglas Elliman Realty, LLC, which occurred in 2013.
c. Represents proceeds received from a litigation award at Douglas
Elliman Realty, LLC.
 

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