TABLE 1
VECTOR GROUP LTD. AND SUBSIDIARIES
COMPUTATION OF PRO-FORMA ADJUSTED EBITDA
(Unaudited)
(Dollars in Thousands)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended |
| | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | | | |
| | | | |
| Net income attributed to Vector Group Ltd. | $ | 7,904 |
| | $ | 12,466 |
| | $ | 17,607 |
| | $ | 21,221 |
|
| Interest expense | 24,286 |
| | 32,898 |
| | 31,761 |
| | 31,746 |
|
| Income tax expense | 3,494 |
| | 13,694 |
| | 11,178 |
| | 12,867 |
|
| Net income attributed to non-controlling interest | 1,533 |
| | 3,644 |
| | 1,837 |
| | 260 |
|
| Depreciation and amortization | 6,258 |
| | 6,673 |
| | 6,442 |
| | 6,281 |
|
| EBITDA | $ | 43,475 |
| | $ | 69,375 |
| | $ | 68,825 |
| | $ | 72,375 |
|
| Change in fair value of derivatives embedded within convertible debt (a) | (5,695 | ) | | (7,044 | ) | | (5,256 | ) | | (6,460 | ) |
| Equity in losses (earnings) from investments (b) | 27 |
| | 1,103 |
| | 2,163 |
| | (612 | ) |
| Loss (gain) on sale of investment securities available for sale | 880 |
| | 821 |
| | 190 |
| | (13,029 | ) |
| Impairment of investment securities available for sale | 635 |
| | 12,211 |
| | — |
| | — |
|
| Equity in (earnings) losses from real estate ventures (c) | (723 | ) | | 916 |
| | (1,856 | ) | | (338 | ) |
| Pension settlement charge | — |
| | — |
| | 1,607 |
| | — |
|
| Stock-based compensation expense (d) | 1,972 |
| | 1,248 |
| | 1,236 |
| | 1,164 |
|
| Litigation settlement and judgment expense (e) | 14,229 |
| | 3,750 |
| | 1,250 |
| | 843 |
|
| Impact of MSA settlement (f) | 1,351 |
| | (5,715 | ) | | — |
| | — |
|
| Restructuring expense | 5,709 |
| | 1,548 |
| | — |
| | — |
|
| Purchase accounting adjustments (g) | 379 |
| | 366 |
| | 358 |
| | 332 |
|
| Other, net | (1,309 | ) | | (1,342 | ) | | (1,821 | ) | | (1,937 | ) |
| Pro-forma Adjusted EBITDA | $ | 60,930 |
| | $ | 77,237 |
| | $ | 66,696 |
| | $ | 52,338 |
|
| Pro-forma Adjusted EBITDA attributed to non-controlling interest | (2,535 | ) | | (4,735 | ) | | (2,913 | ) | | (1,084 | ) |
| Pro-forma Adjusted EBITDA attributed to Vector Group Ltd. | $ | 58,395 |
| | $ | 72,502 |
| | $ | 63,783 |
| | $ | 51,254 |
|
| | | | | | | | |
| Pro-forma Adjusted EBITDA by Segment | | | | | | | |
| Tobacco | $ | 63,794 |
| | $ | 66,084 |
| | $ | 62,024 |
| | $ | 53,472 |
|
| E-cigarettes | (5,327 | ) | | (2,146 | ) | | (2,400 | ) | | (3,164 | ) |
| Real Estate (h) | 6,413 |
| | 15,981 |
| | 10,326 |
| | 5,391 |
|
| Corporate and Other | (3,950 | ) | | (2,682 | ) | | (3,254 | ) | | (3,361 | ) |
| Total | $ | 60,930 |
| | $ | 77,237 |
| | $ | 66,696 |
| | $ | 52,338 |
|
| | | | | | | | |
| Pro-forma Adjusted EBITDA Attributed to Vector Group by Segment | | | | | | | |
| Tobacco | $ | 63,794 |
| | $ | 66,084 |
| | $ | 62,024 |
| | $ | 53,472 |
|
| E-cigarettes | (5,327 | ) | | (2,146 | ) | | (2,400 | ) | | (3,164 | ) |
| Real Estate (i) | 3,878 |
| | 11,246 |
| | 7,413 |
| | 4,307 |
|
| Corporate and Other | (3,950 | ) | | (2,682 | ) | | (3,254 | ) | | (3,361 | ) |
| Total | $ | 58,395 |
| | $ | 72,502 |
| | $ | 63,783 |
| | $ | 51,254 |
|
| | | | | | | | |
| |
| a. | Represents income or losses recognized from changes in the fair value of the derivatives embedded in the Company's convertible debt. |
| |
| b. | Represents income or losses recognized from investments that the Company accounts for under the equity method. |
| |
| c. | Represents equity income (loss) 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. |
| |
| 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 Pro-forma Adjusted EBITDA for Douglas Elliman Realty, LLC of $5,855, $16,294, $9,906,and $3,685 for the three months ended December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively. Amounts reported in this footnote reflect 100% of Douglas Elliman Realty, LLC's entire Pro-forma Adjusted EBITDA. |
| |
| i. | Includes Pro-forma Adjusted EBITDA for Douglas Elliman Realty, LLC less non-controlling interest of $4,133, $11,502, $6,993, and $2,601 for the three months ended December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively. Amounts reported in this footnote have adjusted Douglas Elliman Realty, LLC's Pro-forma Adjusted EBITDA for non-controlling interest. |
TABLE 1
VECTOR GROUP LTD. AND SUBSIDIARIES
COMPUTATION OF PRO-FORMA ADJUSTED EBITDA
(Unaudited)
(Dollars in Thousands, Except Per Share Amounts)
|
| | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2015 | | 2014 | | 2013 | | 2012 | | 2011 |
| | | | | | | | | | |
| Net income attributed to Vector Group Ltd. | $ | 59,198 |
| | $ | 36,856 |
| | $ | 37,300 |
| | 30,675 |
| | $ | 74,478 |
|
| Interest expense | 120,691 |
| | 160,991 |
| | 132,147 |
| | 110,102 |
| | 100,706 |
|
| Income tax expense | 41,233 |
| | 33,165 |
| | 23,672 |
| | 23,131 |
| | 47,767 |
|
| Net income (loss) attributed to non-controlling interest | 7,274 |
| | 12,258 |
| | (252 | ) | | — |
| | — |
|
| Depreciation and amortization | 25,654 |
| | 24,499 |
| | 12,631 |
| | 10,608 |
| | 10,607 |
|
| EBITDA | 254,050 |
| | 267,769 |
| | 205,498 |
| | 174,516 |
| | 233,558 |
|
| Change in fair value of derivatives embedded within convertible debt (a) | (24,455 | ) | | (19,409 | ) | | (18,935 | ) | | 7,476 |
| | (7,984 | ) |
| Gain on liquidation of long-term investments | — |
| | — |
| | — |
| | — |
| | (25,832 | ) |
| Equity in losses (earnings) on long-term investments (b) | 2,681 |
| | (3,140 | ) | | (3,126 | ) | | (264 | ) | | 710 |
|
| Loss (gain) on sale of investment securities available for sale | (11,138 | ) | | 11 |
| | (5,152 | ) | | (1,640 | ) | | (23,257 | ) |
| Impairment of investment securities | 12,846 |
| | — |
| | — |
| | — |
| | — |
|
| Equity in earnings from real estate ventures (c) | (2,001 | ) | | (4,103 | ) | | (22,925 | ) | | (29,764 | ) | | (19,966 | ) |
| Gain on sale of townhomes | — |
| | — |
| | — |
| | — |
| | (3,843 | ) |
| Loss on extinguishment of debt | — |
| | — |
| | 21,458 |
| | — |
| | 1,217 |
|
| Acceleration of interest expense related to debt conversion | — |
| | 5,205 |
| | 12,414 |
| | 14,960 |
| | — |
|
| Pension Settlement Charge | 1,607 |
| | — |
| | — |
| | — |
| | — |
|
| Stock-based compensation expense (d) | 5,620 |
| | 3,251 |
| | 2,519 |
| | 5,563 |
| | 3,183 |
|
| Litigation settlement and judgment expense (e) | 20,072 |
| | 2,475 |
| | 88,106 |
| | — |
| | — |
|
| Impact of MSA Settlement (f) | (4,364 | ) | | (1,419 | ) | | (11,823 | ) | | — |
| | — |
|
| Restructuring expense | 7,257 |
| | — |
| | — |
| | — |
| | — |
|
| Gain on acquisition of Douglas Elliman | — |
| | — |
| | (60,842 | ) | | — |
| | — |
|
| Reclassification of EBITDA as a result of the consolidation of Douglas Elliman (g) | — |
| | — |
| | 46,640 |
| | 31,558 |
| | 30,991 |
|
| Purchase accounting adjustments (h) | 1,435 |
| | 1,478 |
| | — |
| | — |
| | — |
|
| Other, net | (6,409 | ) | | (9,396 | ) | | (4,573 | ) | | (593 | ) | | (1,375 | ) |
| Pro-forma Adjusted EBITDA | 257,201 |
| | 242,722 |
| | 249,259 |
| | 201,812 |
| | 187,402 |
|
| Pro-forma Adjusted EBITDA attributed to non-controlling interest | (11,267 | ) | | (15,858 | ) | | (13,717 | ) | | (9,281 | ) | | (9,114 | ) |
| Pro-forma Adjusted EBITDA attributed to Vector Group Ltd. | 245,934 |
| | 226,864 |
| | 235,542 |
| | 192,531 |
| | 178,288 |
|
| | | | | | | | | | |
| Pro-forma Adjusted EBITDA by Segment | | | | | | | | | |
| Tobacco | 245,374 |
| | 211,168 |
| | 198,866 |
| | 185,798 |
| | 173,721 |
|
| E-cigarettes | (13,037 | ) | | (13,124 | ) | | (1,019 | ) | | — |
| | — |
|
| Real Estate (i) | 38,111 |
| | 56,036 |
| | 64,866 |
| | 29,959 |
| | 29,388 |
|
| Corporate and Other | (13,247 | ) | | (11,358 | ) | | (13,454 | ) | | (13,945 | ) | | (15,707 | ) |
| Total | 257,201 |
| | 242,722 |
| | 249,259 |
| | 201,812 |
| | 187,402 |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Pro-forma Adjusted EBITDA by Segment Attributed to VGR | | | | | | | | | |
| Tobacco | 245,374 |
| | 211,168 |
| | 198,866 |
| | 185,798 |
| | 173,721 |
|
| E-cigarettes | (13,037 | ) | | (13,124 | ) | | (1,019 | ) | | — |
| | — |
|
| Real Estate (j) | 26,844 |
| | 40,178 |
| | 51,149 |
| | 20,678 |
| | 20,274 |
|
| Corporate and Other | (13,247 | ) | | (11,358 | ) | | (13,454 | ) | | (13,945 | ) | | (15,707 | ) |
| Total | 245,934 |
| | 226,864 |
| | 235,542 |
| | 192,531 |
| | 178,288 |
|
| |
| a. | Represents income or losses recognized from changes in the fair value of the derivatives embedded in the Company's convertible debt. |
| |
| b. | Represents income or losses recognized from investments that the Company accounts for under the equity method. |
| |
| c. | Represents equity income (loss) 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. |
| |
| f. | Represents the Company's tobacco segment's settlement of a long-standing dispute related to the Master Settlement Agreement. |
| |
| g. | Represents EBITDA of Douglas Elliman Realty, LLC for all periods prior to December 13, 2013. On December 13, 2013, the Company increased its ownership of Douglas Elliman Realty, LLC from 50% to 70.59%. Consequently, after December 13, 2013, the Company consolidates the operations and financial position of Douglas Elliman Realty, LLC in its financial statements. The Company had previously accounted for its interest in Douglas Elliman Realty, LLC under the equity method, and operating income as well as depreciation and amortization expense from Douglas Elliman Realty, LLC, were not included in the Company's Adjusted EBITDA. |
| |
| h. | 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. |
| |
| i. | Includes Pro-forma Adjusted EBITDA for Douglas Elliman Realty, LLC of $35,740, $50,655, $45,710, $30,910, and $30,991 for the years ended December 31, 2015, 2014, 2013, 2012, and 2011, respectively. Amounts reported in this footnote reflect 100% of Douglas Elliman Realty, LLC's entire Pro-forma Adjusted EBITDA. |
| |
| j. | Includes Pro-forma Adjusted EBITDA for Douglas Elliman Realty, LLC less non-controlling interest of $25,229, $35,757, $31,993, $21,629, and $21,877 for the years ended December 31, 2015, 2014, 2013, 2012, and 2011 respectively. Amounts reported in this footnote have adjusted Douglas Elliman Realty, LLC's Pro-forma Adjusted EBITDA for non-controlling interest. |
TABLE 2
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF PRO-FORMA ADJUSTED NET INCOME
(Unaudited)
(Dollars in Thousands, Except Per Share Amounts)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended |
| | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | | | |
| | | | |
| Net income attributed to Vector Group Ltd. | $ | 7,904 |
| | $ | 12,466 |
| | $ | 17,607 |
| | $ | 21,221 |
|
| | | | | | | | |
| Change in fair value of derivatives embedded within convertible debt | (5,695 | ) | | (7,044 | ) | | (5,256 | ) | | (6,460 | ) |
| Non-cash amortization of debt discount on convertible debt | 7,565 |
| | 7,187 |
| | 6,516 |
| | 5,943 |
|
| Litigation settlement and judgment expense (a) | 14,229 |
| | 3,750 |
| | 1,250 |
| | 843 |
|
| Cash interest capitalized to real estate venture | (9,928 | ) | | — |
| | — |
| | — |
|
| Impact of MSA settlement (b) | 1,351 |
| | (5,715 | ) | | — |
| | — |
|
| Pension settlement charge | — |
| | — |
| | 1,607 |
| | — |
|
| Restructuring expense | 5,709 |
| | 1,548 |
| | — |
| | — |
|
| Douglas Elliman Realty, LLC purchase accounting adjustments (c) | 1,358 |
| | 1,351 |
| | 1,343 |
| | 1,251 |
|
| Total adjustments | 14,589 |
| | 1,077 |
| | 5,460 |
| | 1,577 |
|
| | | | | | | | |
| Tax expense related to adjustments | (6,089 | ) | | (448 | ) | | (2,258 | ) | | (652 | ) |
| | | | | | | | |
| Pro-forma Adjusted Net Income attributed to Vector Group Ltd. | $ | 16,404 |
| | $ | 13,095 |
| | $ | 20,809 |
| | $ | 22,146 |
|
| | | | | | | | |
| Per diluted common share: | | | | | | | |
| | | | | | | | |
| Pro-forma Adjusted Net Income applicable to common shares attributed to Vector Group Ltd. | $ | 0.13 |
| | $ | 0.11 |
| | $ | 0.17 |
| | $ | 0.18 |
|
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. |
| |
| 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 2
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF PRO-FORMA ADJUSTED NET INCOME
(Unaudited)
(Dollars in Thousands, Except Per Share Amounts)
|
| | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2015 | | 2014 | | 2013 | | 2012 | | 2011 |
| Net income attributed to Vector Group Ltd. | $ | 59,198 |
| | $ | 36,856 |
| | $ | 37,300 |
| | 30,675 |
| | $ | 74,478 |
|
| | | | | | | | | | |
| Acceleration of interest expense related to debt conversion | — |
| | 5,205 |
| | 12,414 |
| | 14,960 |
| | 1,217 |
|
| Change in fair value of derivatives embedded within convertible debt | (24,455 | ) | | (19,409 | ) | | (18,935 | ) | | 7,476 |
| | (7,984 | ) |
| Non-cash amortization of debt discount on convertible debt | 27,211 |
| | 51,472 |
| | 36,378 |
| | 18,016 |
| | 10,441 |
|
| Loss on extinguishment of 11% Senior Secured Notes due 2015 | — |
| | — |
| | 21,458 |
| | — |
| | — |
|
| Litigation settlement and judgment expense (a) | 20,072 |
| | 2,475 |
| | 88,106 |
| | — |
| | — |
|
| Capitalized Interest | (9,928 | ) | | — |
| | — |
| | — |
| | — |
|
| Impact of MSA Settlement (b) | (4,364 | ) | | (1,419 | ) | | (11,823 | ) | | — |
| | — |
|
| Interest income from MSA Settlement (c) | — |
| | — |
| | (1,971 | ) | | — |
| | — |
|
| Pensions Settlement Charge | 1,607 |
| | — |
| | — |
| | — |
| | — |
|
| Gain on acquisition of Douglas Elliman Realty, LLC (d) | — |
| | — |
| | (60,842 | ) | | — |
| | — |
|
| Restructuring expense | 7,257 |
| | — |
| | — |
| | — |
| | — |
|
| Gain on liquidation of long-term investments | — |
| | — |
| | — |
| | — |
| | (25,832 | ) |
| Gain on townhomes | — |
| | — |
| | — |
| | — |
| | (3,843 | ) |
| Adjustment to reflect additional 20.59% of net income from Douglas Elliman Realty, LLC (e) | — |
| | — |
| | 8,557 |
| | 5,947 |
| | 5,811 |
|
| Out-of-period adjustment related to Douglas Elliman acquisition in 2013 (f) | — |
| | (1,231 | ) | | — |
| | — |
| | — |
|
| Douglas Elliman Realty, LLC purchase accounting adjustments (g) | 5,303 |
| | 6,019 |
| | 1,165 |
| | — |
| | — |
|
| Total adjustments | 22,703 |
| | 43,112 |
| | 74,507 |
| | 46,399 |
| | (20,190 | ) |
| | | |
| | | | | | |
| Tax (expense) benefit related to adjustments | (9,447 | ) | | (17,827 | ) | | (29,467 | ) | | (19,332 | ) | | 8,197 |
|
| One-time adjustment to income tax expense due to purchase accounting (h) | — |
| | 1,670 |
| | — |
| | — |
| | — |
|
| Pro-forma Adjusted Net Income attributed to Vector Group Ltd. | 72,454 |
| | 63,811 |
| | 82,340 |
| | 57,742 |
| | 62,485 |
|
| | | | | | | | | | |
| Per diluted common share: | | | | | | | | | |
| | | | | | | | | | |
| Pro-forma Adjusted Net Income applicable to common shares attributed to Vector Group Ltd. | 0.60 |
| | 0.57 |
| | 0.79 |
| | 0.58 |
| | 0.64 |
|
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. |
| |
| c. | Represents interest income from the Company's tobacco segment's settlement of a long-standing dispute related to the Master Settlement Agreement. |
| |
| d. | Represents gain associated with the increase of ownership of Douglas Elliman Realty, LLC. |
| |
| e. | Represents 20.59% of Douglas Elliman Realty LLC's net income from January 1, 2013 to December 13, 2013 and the years ended December 31, 2012 and 2011. On December 13, 2013, the Company increased its ownership of Douglas Elliman Realty, LLC from 50% to 70.59%. Consequently, after December 13, 2013, the Company includes an additional 20.59% of Adjusted Net Income from Douglas Elliman Realty, LLC in the Company's Adjusted Net Income. |
| |
| f. | Represents an out-of-period adjustment related to a non-accrual of a receivable from Douglas Elliman Realty in the fourth quarter of 2013 and would have increased the Company's gain on acquisition of Douglas Elliman in 2013. |
| |
| g. | 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. |
| |
| h. | Represents adjustments to income tax expense due to a change in the Company's marginal income tax rate from 40.6% to 41.35% as a result of its acquisition of 20.59% of Douglas Elliman Realty, LLC on December 13, 2013. |
TABLE 3
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF PRO-FORMA ADJUSTED OPERATING INCOME
(Unaudited)
(Dollars in Thousands)
|
| | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | December 31, 2015 | | September 30, 2015 | | June 30, 2015 | | March 31, 2015 |
| | | | | |
| | | | | |
| Operating income | | $ | 31,032 |
| | $ | 69,367 |
| | $ | 55,803 |
| | $ | 43,718 |
|
| | | | | | | | | |
| Litigation settlement and judgment expense (a) | | 14,229 |
| | 3,750 |
| | 1,250 |
| | 843 |
|
| Pension settlement charge | | — |
| | — |
| | 1,607 |
| | — |
|
| Restructuring expense | | 5,709 |
| | 1,548 |
| | — |
| | — |
|
| Impact of MSA settlement (b) | | 1,351 |
| | (5,715 | ) | | — |
| | — |
|
| Douglas Elliman Realty, LLC purchase accounting adjustments (c) | | 1,925 |
| | 1,913 |
| | 1,903 |
| | 1,772 |
|
| Total adjustments | | 23,214 |
| | 1,496 |
| | 4,760 |
| | 2,615 |
|
| | | | | | | | | |
| Pro-forma Adjusted Operating Income (d) | | $ | 54,246 |
| | $ | 70,863 |
| | $ | 60,563 |
| | $ | 46,333 |
|
| |
| 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. |
| |
| 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 3
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF PRO-FORMA ADJUSTED OPERATING INCOME
(Unaudited)
(Dollars in Thousands)
|
| | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2015 | | 2014 | | 2013 | | 2012 | | 2011 |
| | | | | | |
| Operating income | $ | 199,920 |
| | $ | 212,438 |
| | $ | 111,186 |
| | $ | 154,083 |
| | $ | 142,621 |
|
| | | | | | | | | | |
| Litigation settlement and judgment expense (a) | 20,072 |
| | 2,475 |
| | 88,106 |
| | — |
| | — |
|
| Pension settlement charge | 1,607 |
| | — |
| | — |
| | — |
| | — |
|
| Restructuring expense | 7,257 |
| | — |
| | — |
| | — |
| | — |
|
| Impact of MSA settlement (b) | (4,364 | ) | | (1,419 | ) | | (11,823 | ) | | — |
| | — |
|
| Reclassification of operating income as a result of the consolidation of Douglas Elliman Realty, LLC (c) | — |
| | — |
| | 42,598 |
| | 27,894 |
| | 27,299 |
|
| Douglas Elliman Realty, LLC purchase accounting adjustments (d) | 7,513 |
| | 8,527 |
| | 1,650 |
| | — |
| | — |
|
| Total adjustments | 32,085 |
| | 9,583 |
| | 120,531 |
| | 27,894 |
| | 27,299 |
|
| | | | | | | | | | |
| Pro-forma Adjusted Operating Income (e) | $ | 232,005 |
| | $ | 222,021 |
| | $ | 231,717 |
| | $ | 181,977 |
| | $ | 169,920 |
|
| |
| 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. |
| |
| c. | Represents Adjusted Operating Income of Douglas Elliman Realty, LLC for all periods prior to December 13, 2013. On December 13, 2013, the Company increased its ownership of Douglas Elliman Realty, LLC from 50% to 70.59%. Consequently, after December 13, 2013, the Company consolidates the operations and financial position of Douglas Elliman Realty in its financial statements. The Company had previously accounted for its interest in Douglas Elliman under the equity method and operating income from Douglas Elliman Realty, LLC was not included in the Company's operating income. |
| |
| d. | 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. |
| |
| e. | Does not include a reduction for 29.41% non-controlling interest in Douglas Elliman Realty, LLC. |
