Business Wire | Aug 4, 2021 05:01PM EDT

Vector Group Reports Second Quarter 2021 Financial Results

Aug. 04, 2021

MIAMI--(BUSINESS WIRE)--Aug. 04, 2021--Vector Group Ltd. (NYSE:VGR) today announced second quarter 2021 financial results.

"Vector had another outstanding quarter, achieving all-time high quarterly revenues and significantly increased operating income in both our Tobacco and Real Estate segments," said Howard Lorber, President and Chief Executive Officer of Vector Group.

"We are excited by the continued strong performance of our tobacco business which validates our market strategy and reflects the competitive advantages we have in the deep discount segment, as demonstrated by increased Adjusted EBITDA during the quarter. Our Douglas Elliman subsidiary also delivered record revenues up 195% compared to the year ago period, and closed sales volume was up 209% over the same timeframe. Combined with expense reductions, Douglas Elliman achieved record quarterly Adjusted EBITDA during the second quarter."

GAAP Financial Results

Three months ended June 30, 2021 and 2020. Second quarter 2021 revenues were $729.5 million, compared to revenues of $445.8 million in the second quarter of 2020. The Company recorded operating income of $137.1 million in the second quarter of 2021, compared to operating income of $66.8 million in the second quarter of 2020. Net income attributed to Vector Group Ltd. for the second quarter of 2021 was $93.3 million, or $0.61 per diluted common share, compared to net income of $25.8 million, or $0.16 per diluted common share, in the second quarter of 2020. Operating income and net income for the second quarter of 2020 included pretax restructuring charges of $3.0 million in the Company's Real Estate segment.

Six months ended June 30, 2021 and 2020. For the six months ended June 30, 2021, revenues were $1.27 billion, compared to revenues of $900.2 million for the six months ended June 30, 2020. The Company recorded operating income of $227.3 million for the six months ended June 30, 2021, compared to operating income of $61.9 million for the six months ended June 30, 2020. Net income attributed to Vector Group Ltd. for the six months ended June 30, 2021 was $125.3 million, or $0.81 per diluted common share, compared to net income of $22.5 million, or $0.14 per diluted common share, for the six months ended June 30, 2020. Operating income and net income for the six months ended June 30, 2020 included pre-tax and non-cash impairment charges of $58.3 million and pre-tax restructuring charges of $3.0 million in the Company's Real Estate segment.

Non-GAAP Financial Measures

Non-GAAP financial measures include adjustments for change in fair value of derivatives embedded within convertible debt, loss on extinguishment of debt, litigation settlements and judgment expense, impact of Master Settlement Agreement settlements, restructuring charges, net gains on sales of assets (for purposes of Adjusted EBITDA and Adjusted Operating Income only), and impairments of goodwill and other intangible assets. For purposes of Adjusted EBITDA only, adjustments include equity in earnings from investments, equity in (earnings) losses from real estate ventures, stock-based compensation expense, and other, net. For purposes of Adjusted Net Income only, adjustments include non-cash amortization of debt discount on convertible debt, net interest expense capitalized to real estate ventures, and the derivative associated with the 2018 acquisition of 29.41% of Douglas Elliman. Reconciliations of non-GAAP financial measures to the comparable GAAP financial results for the last twelve months ended June 30, 2021 and the three and six months ended June 30, 2021 and 2020 are included in Tables 2 through 8.

Three months ended June 30, 2021 compared to the three months ended June 30, 2020

Adjusted EBITDA attributed to Vector (as described in Table 2 attached hereto) were $144.2 million for the second quarter of 2021, compared to $76.5 million for the second quarter of 2020.

Adjusted Net Income (as described in Table 3 attached hereto) was $96.5 million, or $0.63 per diluted share, for the second quarter of 2021, and $28.7 million or $0.19 per diluted share, for the second quarter of 2020.

Adjusted Operating Income (as described in Table 4 attached hereto) was $137.1 million for the second quarter of 2021, compared to $69.8 million for the second quarter of 2020.

Six months ended June 30, 2021 compared to the six months ended June 30, 2020

Adjusted EBITDA attributed to Vector (as described in Table 2 attached hereto) were $238.6 million for the six months ended June 30, 2021, compared to $136.7 million for the six months ended June 30, 2020.

Adjusted Net Income (as described in Table 3 attached hereto) was $141.8 million, or $0.92 per diluted share, for the six months ended June 30, 2021, compared to $68.6 million, or $0.45 per diluted share, for the six months ended June 30, 2020.

Adjusted Operating Income (as described in Table 4 attached hereto) was $224.6 million for the six months ended June 30, 2021, compared to $123.2 million for the six months ended June 30, 2020.

Last twelve months ended June 30, 2021

For the last twelve months ended June 30, 2021, revenues were $2.38 billion. The Company recorded operating income of $410.5 million for the last twelve months ended June 30, 2021. Net income attributed to Vector Group Ltd. for the last twelve months ended June 30, 2021 was $195.7 million.

For the last twelve months ended June 30, 2021, Adjusted EBITDA attributed to Vector (as described in Table 2 attached hereto) were $435.3 million. Adjusted Operating Income (as described in Table 4 attached hereto) was $407.7 million for the last twelve months ended June 30, 2021.

Consolidated Balance Sheet

Vector maintained significant liquidity at June 30, 2021 with cash and cash equivalents of $490 million, including $108 million of cash at Liggett and $155 million of cash at Douglas Elliman. Vector also held investment securities of $157 million and long-term investments of $55 million.

Vector continued its longstanding history of paying a quarterly cash dividend in the second quarter of 2021. For the six months ended June 30, 2021, Vector returned a total of $63 million to stockholders at a quarterly rate of $0.20 per common share.

Tobacco Segment Financial Results

For the second quarter of 2021, the Tobacco segment had revenues of $329.5 million, compared to $312.5 million for the second quarter of 2020. For the six months ended June 30, 2021, the Tobacco segment had revenues of $598.0 million, compared to $599.6 million for the six months ended June 30, 2020. For the last twelve months ended June 30, 2021, the Tobacco segment had revenues of $1.2 billion.

Operating Income from the Tobacco segment was $103.2 million and $184.8 million for the three and six months ended June 30, 2021, respectively, compared to $79.3 million and $148.5 million for the three and six months ended June 30, 2020, respectively. Operating Income from the Tobacco segment was $355.8 million for the last twelve months ended June 30, 2021.

Non-GAAP Financial Measures

Tobacco Adjusted Operating Income (as described in Table 5 attached hereto) for the second quarter of 2021 and 2020 was $103.2 million and $79.4 million, respectively. Tobacco Adjusted Operating Income for the six months ended June 30, 2021 was $182.1 million, compared to $148.5 million for the six months ended June 30, 2020. Tobacco Adjusted Operating Income for the last twelve months ended June 30, 2021 was $353.7 million.

For the second quarter of 2021, the Tobacco segment had conventional cigarette (wholesale) shipments of approximately 2.36 billion units, compared to 2.41 billion units for the second quarter of 2020. For the six months ended June 30, 2021, the Tobacco segment had conventional cigarette (wholesale) shipments of approximately 4.30 billion units, compared to 4.66 billion units for the six months ended June 30, 2020.

According to data from Management Science Associates, for the second quarter of 2021, Liggett's retail market share declined to 4.09% compared to 4.31% for the second quarter of 2020. For the six months ended June 30, 2021, Liggett's retail market share declined to 4.13%, compared to 4.29% for the six months ended June 30, 2020. Compared to the second quarter of 2020, Liggett's retail shipments in the second quarter of 2021 declined by 7.0% while the overall industry's retail shipments declined by 2.1%. Compared to the six months ended June 30, 2020, Liggett's retail shipments for six months ended June 30, 2021 declined by 6.4% while the overall industry's retail shipments declined by 2.7%.

Real Estate Segment Financial Results

For the second quarter of 2021, the Real Estate segment had revenues of $400.0 million compared to $133.3 million for the second quarter of 2020. For the six months ended June 30, 2021, the Real Estate segment had revenues of $675.3 million, compared to $300.7 million for the six months ended June 30, 2020. For the last twelve months ended June 30, 2021, the Real Estate segment had revenues of $1.17 billion. For the second quarter of 2021, the Real Estate segment reported net income of $39.4 million, compared to a net loss of $12.4 million for the second quarter of 2020. For the six months ended June 30, 2021, the Real Estate segment reported net income of $51.5 million, compared to a net loss of $66.8 million for the six months ended June 30, 2020.

Douglas Elliman's results are included in the Company's Real Estate segment. For the second quarter of 2021, Douglas Elliman had revenues of $392.0 million, compared to $132.9 million for the second quarter of 2020. For the six months ended June 30, 2021, Douglas Elliman had revenues of $664.8 million, compared to $298.5 million for the six months ended June 30, 2020. For the last twelve months ended June 30, 2021, Douglas Elliman had revenues of $1.14 billion. For the second quarter of 2021, Douglas Elliman reported net income of $43.2 million, compared to a net loss of $5.0 million for the second quarter of 2020. For the six months ended June 30, 2021, Douglas Elliman reported net income of $57.1 million, compared to a net loss of $74.1 million for the six months ended June 30, 2020.

Results for the second quarter of 2020 for the Real Estate segment and Douglas Elliman included pre-tax restructuring charges of $3.0 million and the Real Estate segment's and Douglas Elliman's net loss for the six months ended June 30, 2020 included pre-tax and non-cash impairment charges of $58.3 million and pre-tax restructuring charges of $3.0 million.

Non-GAAP Financial Measures

For the second quarter of 2021, Real Estate Adjusted EBITDA attributed to Vector (as described in Table 6 attached hereto) were $44.6 million, compared to a loss of $1.7 million for the second quarter of 2020.

For the six months ended June 30, 2021, Real Estate Adjusted EBITDA attributed to Vector were $62.1 million, compared to a loss of $8.6 million for the six months ended June 30, 2020.

For the last twelve months ended June 30, 2021, Real Estate net income was $42.4 million and Real Estate Adjusted EBITDA were $92.5 million.

For the second quarter of 2021, Douglas Elliman's Adjusted EBITDA (as described in Table 7 attached hereto) were $45.3 million, compared to a loss of $1.1 million for the second quarter of 2020.

For the six months ended June 30, 2021, Douglas Elliman's Adjusted EBITDA were $61.6 million, compared to a loss of $8.8 million for the six months ended June 30, 2020.

For the last twelve months ended June 30, 2021, Douglas Elliman's net income was $83.0 million and Douglas Elliman's Adjusted EBITDA were $92.4 million.

For the three and six months ended June 30, 2021, Douglas Elliman achieved closed sales of approximately $14.5 billion and $24.6 billion, respectively, compared to $4.7 billion and $10.8 billion for the three and six months ended June 30, 2020, respectively. For the last twelve months ended June 30, 2021 and the year ended December 31, 2020, Douglas Elliman achieved closed sales of approximately $42.9 billion and $29.1 billion, respectively.

Non-GAAP Financial Measures

Adjusted EBITDA, Adjusted Net Income, Adjusted Operating Income, Tobacco Adjusted Operating Income, Tobacco Adjusted EBITDA, New Valley Adjusted EBITDA, Douglas Elliman Adjusted EBITDA and financial measures for the last twelve months ("LTM") ended June 30, 2021 ("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 8 is information relating to the Company's Non-GAAP Financial Measures for the last twelve months ended June 30, 2021 and the three and six months ended June 30, 2021 and 2020.

Conference Call to Discuss Second Quarter 2021 Results

As previously announced, the Company will host a conference call and webcast on Thursday, August 5, 2021 at 8:30 AM (ET) to discuss its second quarter 2021 results. Investors can access the call by dialing 877-271-1828 and entering 18383182 as the conference ID number. The call will also be available via live webcast at https://www.webcaster4.com/Webcast/Page/2271/42138. 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 5, 2021 through August 19, 2021. To access the replay, dial 877-656-8905 and enter 18383182 as the conference ID number. The archived webcast will also be available at https://www.webcaster4.com/Webcast/Page/2271/42138 for one year.

About Vector Group Ltd.

Vector Group is a holding company for Liggett Group LLC, Vector Tobacco Inc., New Valley LLC, and Douglas Elliman Realty, LLC. Additional information concerning the Company is available on the Company's website, www.VectorGroupLtd.com.

Investors and others should note that we may post information about the Company or its subsidiaries on our website at www.VectorGroupLtd.com and/or at the websites of those subsidiaries or, if applicable, on their accounts on Facebook, Instagram, LinkedIn, TikTok, Twitter, YouTube or other social media platforms. It is possible that the postings or releases could include information deemed to be material information. Therefore, we encourage investors, the media and others interested in the Company to review the information we post on our website at www.VectorGroupLtd.com, on the websites of our subsidiaries and on their social media accounts.

Forward-Looking and Cautionary Statements

This press release includes forward-looking statements within the meaning of the federal securities law. All statements other than statements of historical or current facts, including statements regarding the current or anticipated impact of the COVID-19 pandemic on our business, made in this document are forward-looking. We identify forward-looking statements in this document by using words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "may be," "continue'" "could," "potential," "objective," "plan," "seek," "predict," "project" and "will be" and similar words or phrases or their negatives. Forward-looking statements reflect our current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons. In particular, the extent, duration and severity of the spread of the COVID-19 pandemic and economic consequences stemming from the COVID-19 crisis (including a potential significant economic contraction) as well as related risks and the impact of any of the foregoing on our business, results of operations and liquidity could affect our future results and cause actual results to differ materially from those expressed in forward-looking statements.

Risks and uncertainties that could cause our actual results to differ significantly from our current expectations are described in our 2020 Annual Report on Form 10-K and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021. We undertake no responsibility to publicly update or revise any forward-looking statement except as required by applicable law.

[Financial Tables Follow]

TABLE 1

VECTOR GROUP LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Amounts)

Three Months Ended Six Months Ended

June 30, June 30,

2021 2020 2021 2020

(Unaudited) (Unaudited)

Revenues:

Tobacco* $ 329,496 $ 312,510 $ 597,959 $ 599,579

Real estate 400,033 133,250 675,334 300,669

Total revenues 729,529 445,760 1,273,293 900,248



Expenses:

Cost of sales:

Tobacco* 206,145 214,067 370,176 411,357

Real estate 294,265 90,818 493,776 204,151

Total cost of sales 500,410 304,885 863,952 615,508



Operating, selling,administrative and 92,043 71,064 182,057 161,581 general expenses

Litigation settlement - 53 5 53 and judgment expense

Impairments of goodwilland other intangible - - - 58,252 assets

Restructuring charges - 2,961 - 2,961

Operating income 137,076 66,797 227,279 61,893



Other income (expenses):

Interest expense (28,115 ) (29,358 ) (56,866 ) (64,985 )

Loss on extinguishment - - (21,362 ) - of debt

Change in fair value ofderivatives embedded - 1,669 - 4,999 within convertible debt

Equity in earnings from 941 2,207 1,518 52,359 investments

Equity in earnings(losses) from real 16,685 (12,260 ) 18,274 (18,765 )estate ventures

Other, net 5,578 7,635 8,332 (3,020 )

Income before provision 132,165 36,690 177,175 32,481 for income taxes

Income tax expense 38,860 10,916 51,913 9,938



Net income 93,305 25,774 125,262 22,543



Net loss (income)attributed to - - - - non-controlling interest



Net income attributed $ 93,305 $ 25,774 $ 125,262 $ 22,543 to Vector Group Ltd.



Per basic common share:



Net income applicableto common share $ 0.61 $ 0.17 $ 0.81 $ 0.14 attributed to Vector Group Ltd.



Per diluted common share:



Net income applicableto common share $ 0.61 $ 0.16 $ 0.81 $ 0.14 attributed to Vector Group Ltd.

* Revenues and cost of sales include federal excise taxes of $118,735, $121,170, $216,449 and $234,309 for the three and six months ended June 30, 2021 and 2020, respectively.

* Revenues and cost of sales include federal excise taxes of $118,735,$121,170, $216,449 and $234,309 for the three and six months ended June 30,2021 and 2020, respectively.

TABLE 2

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED EBITDA

(Unaudited)

(Dollars in Thousands)

LTM

Year Ended

Three Months Ended

Six Months Ended

June 30,

December 31,

June 30,

June 30,

2021

2020

2021

2020

2021

2020

Net income attributed to Vector Group Ltd.

$

195,657

$

92,938

$

93,305

$

25,774

$

125,262

$

22,543

Interest expense

113,422

121,541

28,115

29,358

56,866

64,985

Income tax expense

83,752

41,777

38,860

10,916

51,913

9,938

Depreciation and amortization

16,910

17,629

4,089

4,412

8,268

8,987

EBITDA

$

409,741

$

273,885

$

164,369

$

70,460

$

242,309

$

106,453

Change in fair value of derivatives embedded within convertible debt (a)

-

(4,999

)

-

(1,669

)

-

(4,999

)

Equity in earnings from investments (b)

(5,427

)

(56,268

)

(941

)

(2,207

)

(1,518

)

(52,359

)

Equity in losses (earnings) from real estate ventures (c)

7,659

44,698

(16,685

)

12,260

(18,274

)

18,765

Loss on extinguishment of debt

21,362

-

-

-

21,362

-

Stock-based compensation expense (d)

10,682

9,483

3,080

2,283

5,740

4,541

Litigation settlement and judgment expense (e)

289

337

-

53

5

53

Impact of MSA settlement (f)

(2,423

)

299

-

-

(2,722

)

-

Restructuring charges (g)

421

3,382

-

2,961

-

2,961

Net gains on sales of assets

(1,114

)

(1,114

)

-

-

-

-

Impairments of goodwill and other intangible assets (h)

-

58,252

-

-

-

58,252

Other, net

(5,896

)

5,456

(5,578

)

(7,635

)

(8,332

)

3,020

Adjusted EBITDA attributed to Vector Group Ltd.

$

435,294

$

333,411

$

144,245

$

76,506

$

238,570

$

136,687

Adjusted EBITDA Attributed to Vector Group Ltd. by Segment

Tobacco

$

360,989

$

328,049

$

104,885

$

81,362

$

185,530

$

152,590

Real Estate (i)

92,478

21,782

44,588

(1,716

)

62,070

(8,626

)

Corporate and Other

(18,173

)

(16,420

)

(5,228

)

(3,140

)

(9,030

)

(7,277

)

Total

$

435,294

$

333,411

$

144,245

$

76,506

$

238,570

$

136,687

__________________

* Represents income recognized from changes in the fair value of the derivatives embedded in the Company's convertible debt. * Represents equity in earnings recognized from investments that the Company accounts for under the equity method. Included in the amount are equity in earnings from Ladenburg Thalmann Financial Services of $372 for the last twelve months ended June 30, 2021, $53,424 for the year ended December 31, 2020, and $53,052 for the six months ended June 30, 2020. * Represents equity in losses (earnings) recognized from the Company's investment in certain real estate businesses that are accounted for under the equity method and are not consolidated in the Company's financial results. * Represents amortization of stock-based compensation. * Represents accruals for product liability litigation in the Company's Tobacco segment. * Represents the Company's Tobacco segment's settlement of long-standing disputes related to the Master Settlement Agreement. * Represents restructuring charges related to Douglas Elliman Realty, LLC's realignment of administrative support functions, office locations and business model. * Represents non-cash intangible asset impairment charges in the Company's Real Estate segment related to the goodwill and trademark of the Douglas Elliman Realty, LLC reporting unit. * Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of $92,443 for the last twelve months ended June 30, 2021, $22,054 for the year ended December 31, 2020, $45,280, loss of $1,054, $61,631 and loss of $8,758 for the three and six months ended June 30, 2021 and 2020, respectively.TABLE 2

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED EBITDA

(Unaudited)

(Dollars in Thousands)

LTM Year Ended Three Months Ended Six Months Ended

June 30, December June 30, June 30, 31,

2021 2020 2021 2020 2021 2020



Net incomeattributed to $ 195,657 $ 92,938 $ 93,305 $ 25,774 $ 125,262 $ 22,543 Vector Group Ltd.

Interest 113,422 121,541 28,115 29,358 56,866 64,985 expense

Income tax 83,752 41,777 38,860 10,916 51,913 9,938 expense

Depreciationand 16,910 17,629 4,089 4,412 8,268 8,987 amortization

EBITDA $ 409,741 $ 273,885 $ 164,369 $ 70,460 $ 242,309 $ 106,453

Change in fairvalue ofderivativesembedded - (4,999 ) - (1,669 ) - (4,999 )withinconvertibledebt (a)

Equity inearnings from (5,427 ) (56,268 ) (941 ) (2,207 ) (1,518 ) (52,359 )investments (b)

Equity inlosses(earnings) 7,659 44,698 (16,685 ) 12,260 (18,274 ) 18,765 from real estateventures (c)

Loss onextinguishment 21,362 - - - 21,362 - of debt

Stock-basedcompensation 10,682 9,483 3,080 2,283 5,740 4,541 expense (d)

Litigationsettlement and 289 337 - 53 5 53 judgment expense (e)

Impact of MSA (2,423 ) 299 - - (2,722 ) - settlement (f)

Restructuring 421 3,382 - 2,961 - 2,961 charges (g)

Net gains onsales of (1,114 ) (1,114 ) - - - - assets

Impairments ofgoodwill andother - 58,252 - - - 58,252 intangibleassets (h)

Other, net (5,896 ) 5,456 (5,578 ) (7,635 ) (8,332 ) 3,020

AdjustedEBITDAattributed to $ 435,294 $ 333,411 $ 144,245 $ 76,506 $ 238,570 $ 136,687 Vector GroupLtd.



AdjustedEBITDAAttributed to Vector Group Ltd. bySegment

Tobacco $ 360,989 $ 328,049 $ 104,885 $ 81,362 $ 185,530 $ 152,590

Real Estate 92,478 21,782 44,588 (1,716 ) 62,070 (8,626 )(i)

Corporate and (18,173 ) (16,420 ) (5,228 ) (3,140 ) (9,030 ) (7,277 )Other

Total $ 435,294 $ 333,411 $ 144,245 $ 76,506 $ 238,570 $ 136,687

__________________

* Represents income recognized from changes in the fair value of the derivatives embedded in the Company's convertible debt. * Represents equity in earnings recognized from investments that the Company accounts for under the equity method. Included in the amount are equity in earnings from Ladenburg Thalmann Financial Services of $372 for the last twelve months ended June 30, 2021, $53,424 for the year ended December 31, 2020, and $53,052 for the six months ended June 30, 2020. * Represents equity in losses (earnings) recognized from the Company's investment in certain real estate businesses that are accounted for under the equity method and are not consolidated in the Company's financial results. * Represents amortization of stock-based compensation. * Represents accruals for product liability litigation in the Company's Tobacco segment. * Represents the Company's Tobacco segment's settlement of long-standing disputes related to the Master Settlement Agreement. * Represents restructuring charges related to Douglas Elliman Realty, LLC's realignment of administrative support functions, office locations and business model. * Represents non-cash intangible asset impairment charges in the Company's Real Estate segment related to the goodwill and trademark of the Douglas Elliman Realty, LLC reporting unit. * Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of $92,443 for the last twelve months ended June 30, 2021, $22,054 for the year ended December 31, 2020, $45,280, loss of $1,054, $61,631 and loss of $8,758 for the three and six months ended June 30, 2021 and 2020, respectively.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,

2021 2020 2021 2020



Net income attributed to $ 93,305 $ 25,774 $ 125,262 $ 22,543 Vector Group Ltd.



Change in fair value ofderivatives embedded - (1,669 ) - (4,999 )within convertible debt

Non-cash amortization ofdebt discount on - 759 - 5,276 convertible debt

Loss on extinguishment of - - 21,362 - debt

Litigation settlement and - 53 5 53 judgment expense (a)

Impact of MSA settlement - - (2,722 ) - (b)

Impact of net interestexpense capitalized to (559 ) 1,531 (869 ) 3,050 real estate ventures

Adjustment for derivativeassociated withacquisition of 29.41% of 3,595 234 3,523 (1,831 )Douglas Elliman Realty,LLC

Restructuring charges (c) - 2,961 - 2,961

Impairments of goodwilland other intangible - - - 58,252 assets (d)

Total adjustments 3,036 3,869 21,299 62,762



Tax benefit (expense) 151 (981 ) (4,798 ) (16,694 )related to adjustments



Adjusted Net Incomeattributed to Vector Group $ 96,492 $ 28,662 $ 141,763 $ 68,611 Ltd.



Per diluted common share:



Adjusted Net Incomeapplicable to common $ 0.63 $ 0.19 $ 0.92 $ 0.45 shares attributed to Vector Group Ltd.

__________________

* Represents accruals for product liability litigation in the Company's Tobacco segment. * Represents the Company's Tobacco segment's settlement of long-standing disputes related to the Master Settlement Agreement. * Represents restructuring charges related to Douglas Elliman Realty, LLC's realignment of administrative support functions, office locations and business model. * Represents non-cash intangible asset impairment charges in the Company's Real Estate segment related to the goodwill and trademark of the Douglas Elliman Realty, LLC reporting unit.TABLE 4

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF ADJUSTED OPERATING INCOME

(Unaudited)

(Dollars in Thousands)

LTM Year Ended Three Months Ended Six Months Ended

June 30, December June 30, June 30, 31,

2021 2020 2021 2020 2021 2020



Operating $ 410,529 $ 245,143 $ 137,076 $ 66,797 $ 227,279 $ 61,893 income



Litigationsettlement 289 337 - 53 5 53 and judgmentexpense (a)

Restructuring 421 3,382 - 2,961 - 2,961 charges (b)

Impact of MSAsettlement (2,423 ) 299 - - (2,722 ) - (c)

Net gains onsales of (1,114 ) (1,114 ) - - - - assets

Impairmentsof goodwilland other - 58,252 - - - 58,252 intangibleassets (d)

Total (2,827 ) 61,156 - 3,014 (2,717 ) 61,266 adjustments



AdjustedOperating $ 407,702 $ 306,299 $ 137,076 $ 69,811 $ 224,562 $ 123,159 Income

__________________

* Represents accruals for product liability litigation in the Company's Tobacco segment. * Represents restructuring charges related to Douglas Elliman Realty, LLC's realignment of administrative support functions, office locations and business model. * Represents the Company's Tobacco segment's settlement of long-standing disputes related to the Master Settlement Agreement. * Represents non-cash intangible asset impairment charges in the Company's Real Estate segment related to the goodwill and trademark of the Douglas Elliman Realty, LLC reporting unit.TABLE 5

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF TOBACCO ADJUSTED OPERATING INCOME

AND TOBACCO ADJUSTED EBITDA

(Unaudited)

(Dollars in Thousands)

LTM Year Ended Three Months Ended Six Months Ended

June 30, December June 30, June 30, 31,

2021 2020 2021 2020 2021 2020



TobaccoAdjusted Operating Income:

Operatingincome from $ 355,819 $ 319,536 $ 103,179 $ 79,309 $ 184,778 $ 148,495 Tobacco segment



Litigationsettlementand 289 337 - 53 5 53 judgmentexpense (a)

Impact ofMSA (2,423 ) 299 - - (2,722 ) - settlement (b)

Total (2,134 ) 636 - 53 (2,717 ) 53 adjustments



TobaccoAdjusted $ 353,685 $ 320,172 $ 103,179 $ 79,362 $ 182,061 $ 148,548 Operating Income

LTM

Year Ended

Three Months Ended

Six Months Ended

June 30,

December 31,

June 30,

June 30,

2021

2020

2021

2020

2021

2020

Tobacco Adjusted EBITDA:

Operating income from Tobacco segment

$

355,819

$

319,536

$

103,179

$

79,309

$

184,778

$

148,495

Litigation settlement and judgment expense (a)

289

337

-

53

5

53

Impact of MSA settlement (b)

(2,423

)

299

-

-

(2,722

)

-

Total adjustments

(2,134

)

636

-

53

(2,717

)

53

Tobacco Adjusted Operating Income

353,685

320,172

103,179

79,362

182,061

148,548

Depreciation and amortization

7,292

7,877

1,697

2,000

3,457

4,042

Stock-based compensation expense

12

-

9

-

12

-

Total adjustments

7,304

7,877

1,706

2,000

3,469

4,042

Tobacco Adjusted EBITDA

$

360,989

$

328,049

$

104,885

$

81,362

$

185,530

$

152,590

__________________

* Represents accruals for product liability litigation in the Company's Tobacco segment. * Represents the Company's Tobacco segment's settlement of long-standing disputes related to the Master Settlement Agreement. LTM Year Ended Three Months Ended Six Months Ended

June 30, December June 30, June 30, 31,

2021 2020 2021 2020 2021 2020



TobaccoAdjusted EBITDA:

Operatingincome from $ 355,819 $ 319,536 $ 103,179 $ 79,309 $ 184,778 $ 148,495 Tobacco segment



Litigationsettlement 289 337 - 53 5 53 and judgment expense (a)

Impact ofMSA (2,423 ) 299 - - (2,722 ) - settlement (b)

Total (2,134 ) 636 - 53 (2,717 ) 53 adjustments



TobaccoAdjusted 353,685 320,172 103,179 79,362 182,061 148,548 Operating Income



Depreciationand 7,292 7,877 1,697 2,000 3,457 4,042 amortization

Stock-basedcompensation 12 - 9 - 12 - expense

Total 7,304 7,877 1,706 2,000 3,469 4,042 adjustments



TobaccoAdjusted $ 360,989 $ 328,049 $ 104,885 $ 81,362 $ 185,530 $ 152,590 EBITDA

__________________

* Represents accruals for product liability litigation in the Company's Tobacco segment. * Represents the Company's Tobacco segment's settlement of long-standing disputes 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 Year Ended Three Months Ended Six Months Ended

June 30, December June 30, June 30, 31,

2021 2020 2021 2020 2021 2020



Net income(loss)attributed toVector Group $ 42,403 $ (75,910 ) $ 39,398 $ (12,417 ) $ 51,464 $ (66,849 )Ltd. from subsidiarynon-guarantors(a)

Interest 121 268 44 106 75 222 expense (a)

Income taxexpense 17,879 (27,674 ) 16,508 (4,529 ) 21,215 (24,338 )(benefit) (a)

Depreciationand 9,139 8,874 2,374 2,198 4,776 4,511 amortization

EBITDA $ 69,542 $ (94,442 ) $ 58,324 $ (14,642 ) $ 77,530 $ (86,454 )

(Income) lossfromnon-guarantors (332 ) 45 (174 ) 15 (333 ) 44 other than NewValley LLC

Equity inlosses(earnings) 7,659 44,698 (16,685 ) 12,260 (18,274 ) 18,765 from real estateventures (b)

Restructuring 421 3,382 - 2,961 - 2,961 charges (c)

Loss on sale 1,169 1,169 - - - - of asset

Impairments ofgoodwill andother - 58,252 - - - 58,252 intangibleassets (d)

Other, net 13,982 8,575 3,121 (2,325 ) 3,125 (2,282 )

AdjustedEBITDA $ 92,441 $ 21,679 $ 44,586 $ (1,731 ) $ 62,048 $ (8,714 )attributed to New Valley LLC



AdjustedEBITDAAttributed to New Valley LLCby Segment

Real Estate $ 92,478 $ 21,782 $ 44,588 $ (1,716 ) $ 62,070 $ (8,626 )(e)

Corporate and (37 ) (103 ) (2 ) (15 ) (22 ) (88 )Other

Total (f) $ 92,441 $ 21,679 $ 44,586 $ (1,731 ) $ 62,048 $ (8,714 )

__________________

* Amounts are derived from Vector Group Ltd.'s Condensed Consolidated Financial Statements. See Exhibit 99.2 "Condensed Consolidating Financial Information" contained in Vector Group Ltd.'s Form 10-K for the period ended December 31, 2020, Form 10-Q for the period ended June 30, 2021 and Note 14 contained in Vector Group Ltd.'s Form 10-Q for the period ended June 30, 2020. * Represents equity in losses (earnings) recognized from the Company's investment in certain real estate businesses that are accounted for under the equity method and are not consolidated in the Company's financial results. * Represents restructuring charges related to Douglas Elliman Realty, LLC's realignment of administrative support functions, office locations and business model. * Represents non-cash intangible asset impairment charges in the Company's Real Estate segment related to the goodwill and trademark of the Douglas Elliman Realty, LLC reporting unit. * Includes Adjusted EBITDA for Douglas Elliman Realty, LLC of $92,443 for the last twelve months ended June 30, 2021, $22,054 for the year ended December 31, 2020, $45,280, loss of $1,054, $61,631 and loss of $8,758 for the three and six months ended June 30, 2021 and 2020, respectively. * New Valley's Adjusted EBITDA does not include an allocation of Vector Group Ltd.'s "Corporate and Other" segment expenses (for purposes of computing Adjusted EBITDA contained in Table 2 of this press release) of $18,173 for the last twelve months ended June 30, 2021, $16,420 for the year ended December 31, 2020, $5,228, $3,140, $9,030 and $7,277 for the three and six months ended June 30, 2021 and 2020, respectively.TABLE 7

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF DOUGLAS ELLIMAN REALTY, LLC ADJUSTED EBITDA

ATTRIBUTED TO REAL ESTATE SEGMENT

(Unaudited)

(Dollars in Thousands)

LTM Year Ended Three Months Ended Six Months Ended

June 30, December June 30, June 30, 31,

2021 2020 2021 2020 2021 2020



Net income(loss)attributed to $ 82,956 $ (48,210 ) $ 43,160 $ (5,042 ) $ 57,084 $ (74,082 )Douglas EllimanRealty, LLC

Interest 3 1 1 - 3 1 expense

Income taxexpense 826 (5 ) 590 2 833 2 (benefit)

Depreciationand 8,445 8,537 2,097 2,089 4,220 4,312 amortization

DouglasElliman $ 92,230 $ (39,677 ) $ 45,848 $ (2,951 ) $ 62,140 $ (69,767 )Realty, LLC EBITDA

Equity inearnings from (82 ) (30 ) (75 ) - (75 ) (23 )real estate ventures (a)

Restructuring 421 3,382 - 2,961 - 2,961 charges (b)

Loss on sale 1,169 1,169 - - - - of asset

Impairmentsof goodwilland other - 58,252 - - - 58,252 intangibleassets (c)

Other, net (1,295 ) (1,042 ) (493 ) (1,064 ) (434 ) (181 )

DouglasEllimanRealty, LLCAdjusted $ 92,443 $ 22,054 $ 45,280 $ (1,054 ) $ 61,631 $ (8,758 )EBITDA attributed toReal EstateSegment

__________________

* Represents equity in earnings recognized from the Company's investment in certain real estate businesses that are accounted for under the equity method and are not consolidated in the Company's financial results. * Represents restructuring charges related to Douglas Elliman Realty, LLC's realignment of administrative support functions, office locations and business model. * Represents non-cash intangible asset impairment charges related to the goodwill and trademark of Douglas Elliman Realty, LLC.TABLE 8

VECTOR GROUP LTD. AND SUBSIDIARIES

RECONCILIATION OF REVENUES

(Unaudited)

(Dollars in Thousands)

LTM Year Ended Six Months Ended

June 30, December 31, June 30, June 30,

2021 2020 2021 2020

Revenues:

Tobacco (a) $ 1,202,881 $ 1,204,501 $ 597,959 $ 599,579

Real estate (b) 1,172,833 798,168 675,334 300,669

Total revenues $ 2,375,714 $ 2,002,669 $ 1,273,293 $ 900,248

__________________

* Tobacco segment revenues include federal excise taxes of $443,672, $461,532, $216,449 and $234,309 for the last twelve months ended June 30, 2021, the year ended December 31, 2020 and the six months ended June 30, 2021 and 2020, respectively. * Real Estate segment revenues include revenues from Douglas Elliman of $1,140,208, $773,987, $664,751 and $298,530 for the last twelve months ended June 30, 2021, the year ended December 31, 2020 and the six months ended June 30, 2021 and 2020, respectively. View source version on businesswire.com: https://www.businesswire.com/news/home/20210804006131/en/

CONTACT: Emily Claffey/Benjamin Spicehandler/Columbia Clancy Sard Verbinnen & Co 212-687-8080 Eve Young

CONTACT: Sard Verbinnen & Co - Europe +44 (0)20 3178 8914 J. Bryant Kirkland III, Vector Group Ltd. 305-579-8000