VECTOR GROUP LTD. (VGR) Files An 8-K Results of Operations and Financial Condition
Item 2.02. Results of Operations and Financial Condition
On August 31, 2016, the Board of Directors of Vector Group Ltd.
(the Company) declared a 5% stock dividend to stockholders of
record as of September 21, 2016. The stock dividend was paid on
September 29, 2016. The Company is filing updated Selected
Financial Data to reflect the stock dividend as Exhibit 99.1.
(the Company) declared a 5% stock dividend to stockholders of
record as of September 21, 2016. The stock dividend was paid on
September 29, 2016. The Company is filing updated Selected
Financial Data to reflect the stock dividend as Exhibit 99.1.
Revisions to December 31, 2014, 2013, 2012, and 2011 Consolidated
Balance Sheets due to Adoption of Accounting Standard.>>In
April 2015, the Financial Accounting Standards Board (FASB) issued
Accounting Standard Update (ASU) No. 2015-03, Interest-Imputation
of Interest, which requires debt issuance costs to be reported in
the balance sheet as a direct deduction from the face amount of the
note. The guidance is effective for financial statements issued for
fiscal years beginning after December 15, 2015. This amendment must
be applied retrospectively to all periods presented. The Company
adopted the provisions of this ASU retrospectively in the first
quarter of 2016, and adjusted all prior periods accordingly. The
adoption of this ASU will simplify the presentation of debt
issuance costs and reduce complexity without decreasing the
usefulness of information provided to users of financial
statements.
Balance Sheets due to Adoption of Accounting Standard.>>In
April 2015, the Financial Accounting Standards Board (FASB) issued
Accounting Standard Update (ASU) No. 2015-03, Interest-Imputation
of Interest, which requires debt issuance costs to be reported in
the balance sheet as a direct deduction from the face amount of the
note. The guidance is effective for financial statements issued for
fiscal years beginning after December 15, 2015. This amendment must
be applied retrospectively to all periods presented. The Company
adopted the provisions of this ASU retrospectively in the first
quarter of 2016, and adjusted all prior periods accordingly. The
adoption of this ASU will simplify the presentation of debt
issuance costs and reduce complexity without decreasing the
usefulness of information provided to users of financial
statements.
The Company also updated Selected Financial Data to reflect the
adoption of ASU 2015-03. The cumulative impacts of the application
are presented in the table below:
adoption of ASU 2015-03. The cumulative impacts of the application
are presented in the table below:
|
|
|
December 31, 2014
|
||||||||||
|
|
|
As Previously Reported
|
|
ASU Adoption
|
|
As Revised
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Other assets
|
|
$
|
53,902
|
|
$
|
(34,212
|
)
|
|
$
|
19,690
|
||
|
Total assets
|
|
$
|
1,423,254
|
|
$
|
(34,212
|
)
|
|
$
|
1,389,042
|
||
|
|
|
|
|
|
|
|
||||||
|
Notes payable, long-term debt and other obligations, less
current portion |
|
$
|
860,711
|
|
$
|
(34,212
|
)
|
|
$
|
826,499
|
||
|
Total liabilities
|
|
1,443,934
|
|
(34,212
|
)
|
|
1,409,722
|
|||||
|
Total stockholders’ deficiency
|
|
(20,680
|
)
|
(20,680
|
)
|
|||||||
|
Total liabilities and stockholders’ deficiency
|
|
$
|
1,423,254
|
|
$
|
(34,212
|
)
|
|
$
|
1,389,042
|
||
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
||||||||||
|
|
|
As Previously Reported
|
|
ASU Adoption
|
|
As Revised
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Other assets
|
|
$
|
46,666
|
|
$
|
(25,828
|
)
|
|
$
|
20,838
|
||
|
Total assets
|
|
$
|
1,115,793
|
|
$
|
(25,828
|
)
|
|
$
|
1,089,965
|
||
|
|
|
|
|
|
|
|
||||||
|
Notes payable, long-term debt and other obligations, less
current portion |
|
$
|
540,766
|
|
$
|
(25,828
|
)
|
|
$
|
514,938
|
||
|
Total liabilities
|
|
1,166,398
|
|
(25,828
|
)
|
|
1,140,570
|
|||||
|
Total stockholders’ deficiency
|
|
(50,605
|
)
|
(50,605
|
)
|
|||||||
|
Total liabilities and stockholders’ deficiency
|
|
$
|
1,115,793
|
|
$
|
(25,828
|
)
|
|
$
|
1,089,965
|
||
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
||||||||||
|
|
|
As Previously Reported
|
|
ASU Adoption
|
|
As Revised
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Other assets
|
|
$
|
40,778
|
|
$
|
(19,485
|
)
|
|
$
|
21,293
|
||
|
Total assets
|
|
$
|
986,928
|
|
$
|
(19,485
|
)
|
|
$
|
967,443
|
||
|
|
|
|
|
|
|
|
||||||
|
Notes payable, long-term debt and other obligations, less
current portion |
|
$
|
586,946
|
|
$
|
(19,485
|
)
|
|
$
|
567,461
|
||
|
Total liabilities
|
|
1,075,998
|
|
(19,485
|
)
|
|
1,056,513
|
|||||
|
Total stockholders’ deficiency
|
|
(89,070
|
)
|
(89,070
|
)
|
|||||||
|
Total liabilities and stockholders’ deficiency
|
|
$
|
986,928
|
|
$
|
(19,485
|
)
|
|
$
|
967,443
|
||
|
|
|
|
|
|
|
|
|
|
|
December 31, 2011
|
||||||||||
|
|
|
As Previously Reported
|
|
ASU Adoption
|
|
As Revised
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Other assets
|
|
$
|
29,372
|
|
$
|
(7,719
|
)
|
|
$
|
21,653
|
||
|
Total assets
|
|
$
|
824,979
|
|
$
|
(7,719
|
)
|
|
$
|
817,260
|
||
|
|
|
|
|
|
|
|
||||||
|
Notes payable, long-term debt and other obligations, less
current portion |
|
$
|
493,356
|
|
$
|
(7,719
|
)
|
|
$
|
485,637
|
||
|
Total liabilities
|
|
934,987
|
|
(7,719
|
)
|
|
927,268
|
|||||
|
Total stockholders’ deficiency
|
|
(110,008
|
)
|
(110,008
|
)
|
|||||||
|
Total liabilities and stockholders’ deficiency
|
|
$
|
824,979
|
|
$
|
(7,719
|
)
|
|
$
|
817,260
|
||
|
|
|
|
|
|
|
|
Item 7.01 Regulation FD Disclosure
Vector Group Ltd. has prepared materials for presentations to
investors updated for the three months ended September 30, 2016.
The materials are furnished (not filed) as Exhibits 99.3, 99.4
and 99.5 to this Current Report on Form 8-K to Regulation FD.
investors updated for the three months ended September 30, 2016.
The materials are furnished (not filed) as Exhibits 99.3, 99.4
and 99.5 to this Current Report on Form 8-K to Regulation FD.
Non-GAAP Financial Measures
The Company is also filing this Current Report on Form 8-K to
revise previously reported non-GAAP financial measures to reflect
the impact of its recent 5% stock dividend, which was paid on
September 29, 2016>to stockholders of record on September 21,
2016, in calculating its non-GAAP financial measure of Adjusted Net
Income (related to Earnings Per Share). The Company is also
including Adjusted Revenues and Adjusted EBITDA (collectively, with
Adjusted Net Income, the Non-GAAP financial measures) for certain
of the periods presented in the Selected Financial Data. All
Non-GAAP financial measures and their reconciliations to GAAP
measures have been presented as part of Exhibit 99.2. The Non-GAAP
financial measures included in Exhibit 99.2 were previously
reported in the Current Reports on Form 8-K, which were filed on
November 3, 2016, July 28, 2016, April 28, 2016, April 1, 2016,
March 8, 2016 and October 2, 2015.
revise previously reported non-GAAP financial measures to reflect
the impact of its recent 5% stock dividend, which was paid on
September 29, 2016>to stockholders of record on September 21,
2016, in calculating its non-GAAP financial measure of Adjusted Net
Income (related to Earnings Per Share). The Company is also
including Adjusted Revenues and Adjusted EBITDA (collectively, with
Adjusted Net Income, the Non-GAAP financial measures) for certain
of the periods presented in the Selected Financial Data. All
Non-GAAP financial measures and their reconciliations to GAAP
measures have been presented as part of Exhibit 99.2. The Non-GAAP
financial measures included in Exhibit 99.2 were previously
reported in the Current Reports on Form 8-K, which were filed on
November 3, 2016, July 28, 2016, April 28, 2016, April 1, 2016,
March 8, 2016 and October 2, 2015.
Exhibits 99.2, 99.3, 99.4 and 99.5 contain the Non-GAAP Financial
Measures discussed below.
Measures discussed below.
Tables 1 through 4 of Exhibit 99.2 contain information relating to
the Company’s Non-GAAP Financial Measures for the years ended
December 31, 2015, 2014, 2013, 2012 and 2011 and the three months
ended September 30, 2016, June 30, 2016, March 31, 2016, December
31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015.
the Company’s Non-GAAP Financial Measures for the years ended
December 31, 2015, 2014, 2013, 2012 and 2011 and the three months
ended September 30, 2016, June 30, 2016, March 31, 2016, December
31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015.
Non-GAAP Financial Measures include adjustments for purchase
accounting associated with the Company’s acquisition of its
additional 20.59% interest in Douglas Elliman Realty, LLC, and the
related purchase accounting adjustments, occurred prior to the
beginning of each period presented. Non-GAAP Financial Measures
also include adjustments for litigation settlement and judgment
expenses in the Tobacco segment, settlements of long-standing
disputes related to the Master Settlement Agreement
accounting associated with the Company’s acquisition of its
additional 20.59% interest in Douglas Elliman Realty, LLC, and the
related purchase accounting adjustments, occurred prior to the
beginning of each period presented. Non-GAAP Financial Measures
also include adjustments for litigation settlement and judgment
expenses in the Tobacco segment, settlements of long-standing
disputes related to the Master Settlement Agreement
(MSA) in the Tobacco segment, restructuring and pension settlement
expense in the Tobacco segment, non-cash stock compensation expense
(for purposes of Adjusted EBITDA only) and non-cash interest items
associated with the Company’s convertible debt.
expense in the Tobacco segment, non-cash stock compensation expense
(for purposes of Adjusted EBITDA only) and non-cash interest items
associated with the Company’s convertible debt.
Adjusted Revenues, New Valley LLC Adjusted Revenues, Douglas
Elliman Realty, LLC Adjusted Revenues (hereafter referred to as the
Non-GAAP Revenue 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 (hereafter referred to as the Non-GAAP
Financial Measures) are financial measures not prepared in
accordance with 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. In the case of the Non-GAAP Revenue Financial
Measures, management believes revenue growth in its real estate
segment is an important measure of growth because increased
revenues generally result in increased gross margin as a result of
absorption of fixed operating costs, which management believes will
lead to increased future profitability as well as increased
capacity to expand into new and existing markets. A key strategy of
the Company is its ability to move into new markets and therefore
gross revenues provide information with respect to the Company’s
ability to achieve its strategic objectives. Management also
believes increased revenues generally indicate increased market
share in existing markets as well as expansion into new markets.
Consequently, management believes the Non-GAAP Revenue Financial
Measures are meaningful indicators of operating performance.
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.
Elliman Realty, LLC Adjusted Revenues (hereafter referred to as the
Non-GAAP Revenue 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 (hereafter referred to as the Non-GAAP
Financial Measures) are financial measures not prepared in
accordance with 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. In the case of the Non-GAAP Revenue Financial
Measures, management believes revenue growth in its real estate
segment is an important measure of growth because increased
revenues generally result in increased gross margin as a result of
absorption of fixed operating costs, which management believes will
lead to increased future profitability as well as increased
capacity to expand into new and existing markets. A key strategy of
the Company is its ability to move into new markets and therefore
gross revenues provide information with respect to the Company’s
ability to achieve its strategic objectives. Management also
believes increased revenues generally indicate increased market
share in existing markets as well as expansion into new markets.
Consequently, management believes the Non-GAAP Revenue Financial
Measures are meaningful indicators of operating performance.
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.
Adjusted Revenues is defined as Revenues plus the additional
revenues as a result of the consolidation of Douglas Elliman plus
one-time purchase accounting adjustments to fair value for deferred
revenues recorded in connection with the increase of the Companys
ownership of Douglas Elliman. EBITDA is defined as Net Income
before Interest, Taxes, Depreciation and Amortization. Adjusted
EBITDA is EBITDA, as defined above, and as adjusted for changes in
fair value of derivatives embedded with convertible debt, equity in
earnings (losses) on long-term investments, gains (losses) on sale
of investment securities available for sale, equity income from
non-consolidated real estate businesses, loss on extinguishment of
debt, acceleration of interest expense related to debt conversion,
stock-based compensation expense (for purposes of Adjusted EBITDA
only), litigation settlement and judgment expense, settlements of
long-standing disputes related to the MSA, restructuring and
pension settlement expense, gains on acquisition of Douglas
Elliman, changes to EBITDA as a result of the consolidation of
Douglas Elliman and other charges.
revenues as a result of the consolidation of Douglas Elliman plus
one-time purchase accounting adjustments to fair value for deferred
revenues recorded in connection with the increase of the Companys
ownership of Douglas Elliman. EBITDA is defined as Net Income
before Interest, Taxes, Depreciation and Amortization. Adjusted
EBITDA is EBITDA, as defined above, and as adjusted for changes in
fair value of derivatives embedded with convertible debt, equity in
earnings (losses) on long-term investments, gains (losses) on sale
of investment securities available for sale, equity income from
non-consolidated real estate businesses, loss on extinguishment of
debt, acceleration of interest expense related to debt conversion,
stock-based compensation expense (for purposes of Adjusted EBITDA
only), litigation settlement and judgment expense, settlements of
long-standing disputes related to the MSA, restructuring and
pension settlement expense, gains on acquisition of Douglas
Elliman, changes to EBITDA as a result of the consolidation of
Douglas Elliman and other charges.
New Valley LLC (“New Valley”), the real estate subsidiary of the
Company, owns real estate and 70.59% of Douglas Elliman, the
largest residential brokerage firm in the New York metropolitan
area, as well as a minority stake in numerous real estate
investments. New Valley LLC Pro-forma Adjusted Revenues and New
Valley LLC Pro-forma Adjusted EBITDA are defined as the portion of
Pro-forma Adjusted Revenues and Pro-forma Adjusted EBITDA that
relate to New Valley. New Valley’s Pro-forma Adjusted EBITDA does
not include an allocation of expenses from the Corporate and Other
segment of Vector Group Ltd.
Company, owns real estate and 70.59% of Douglas Elliman, the
largest residential brokerage firm in the New York metropolitan
area, as well as a minority stake in numerous real estate
investments. New Valley LLC Pro-forma Adjusted Revenues and New
Valley LLC Pro-forma Adjusted EBITDA are defined as the portion of
Pro-forma Adjusted Revenues and Pro-forma Adjusted EBITDA that
relate to New Valley. New Valley’s Pro-forma Adjusted EBITDA does
not include an allocation of expenses from the Corporate and Other
segment of Vector Group Ltd.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking
statements, which involve risk and uncertainties. The words could,
believe, expect, estimate, may, will, could, plan, or continue and
similar expressions are intended to identify forward-looking
statements. The Companys actual results could differ significantly
from the results discussed in such forward-looking statements.
Factors that could cause or contribute to such differences in
results and outcomes include, without limitation, those discussed
under the heading Risk Factors in the Companys Annual Report on
Form 10-K for the year ended December 31, 2015 and the Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30,
2016. Readers are urged not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
Current Report on Form 8-K. The Company undertakes no obligation to
(and expressly disclaims any obligation to) revise or update any
forward-looking statement, whether as a result of new information,
subsequent events, or otherwise (except as may be required by law),
in order to reflect any event or circumstance which may arise after
the date of this Current Report on Form 8-K.
statements, which involve risk and uncertainties. The words could,
believe, expect, estimate, may, will, could, plan, or continue and
similar expressions are intended to identify forward-looking
statements. The Companys actual results could differ significantly
from the results discussed in such forward-looking statements.
Factors that could cause or contribute to such differences in
results and outcomes include, without limitation, those discussed
under the heading Risk Factors in the Companys Annual Report on
Form 10-K for the year ended December 31, 2015 and the Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30,
2016. Readers are urged not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
Current Report on Form 8-K. The Company undertakes no obligation to
(and expressly disclaims any obligation to) revise or update any
forward-looking statement, whether as a result of new information,
subsequent events, or otherwise (except as may be required by law),
in order to reflect any event or circumstance which may arise after
the date of this Current Report on Form 8-K.
Item 9.01. Condensed Consolidated Financial Statements and
Exhibit
Exhibit
|
(c)
|
Exhibit.
|
|
Exhibit No.
|
|
Exhibit
|
|
99.1
|
|
Selected Financial Data adjusted to reflect 5% stock
dividend paid September 29, 2016 to stockholders of record on September 21, 2016. |
|
99.2
|
|
Non-GAAP Financial Measures (furnished to Regulation FD).
|
|
99.3
|
|
Investor presentation of Vector Group Ltd. dated November
2016 (furnished to Regulation FD). |
|
99.4
|
|
Fact Sheet of Vector Group Ltd. dated November 2016
(furnished to Regulation FD). |
|
99.5
|
|
Fact Sheet of New Valley LLC dated November 2016
(furnished to Regulation FD). |
About VECTOR GROUP LTD. (VGR)