EXHIBIT 99.2
TABLE 1
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA
(Unaudited)
(Dollars in Thousands)
|
| | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2017 | | 2016 | | 2015 | | 2014 | | 2013 |
| | | | | | | | | | |
| Net income attributed to Vector Group Ltd. | $ | 84,572 |
| | $ | 71,127 |
| | $ | 59,198 |
| | $ | 36,856 |
| | $ | 37,300 |
|
| Interest expense | 173,685 |
| | 142,982 |
| | 120,691 |
| | 160,991 |
| | 132,147 |
|
| Income (benefit) tax expense | (1,582 | ) | | 49,163 |
| | 41,233 |
| | 33,165 |
| | 23,672 |
|
| Net income (loss) attributed to non-controlling interest | 6,178 |
| | 6,139 |
| | 7,274 |
| | 12,258 |
| | (252 | ) |
| Depreciation and amortization | 18,614 |
| | 22,359 |
| | 25,654 |
| | 24,499 |
| | 12,631 |
|
| EBITDA | $ | 281,467 |
| | $ | 291,770 |
| | $ | 254,050 |
| | $ | 267,769 |
| | $ | 205,498 |
|
| Change in fair value of derivatives embedded within convertible debt (a) | (35,919 | ) | | (31,710 | ) | | (24,455 | ) | | (19,409 | ) | | (18,935 | ) |
| Equity in losses (earnings) on long-term investments (b) | 765 |
| | 2,754 |
| | 2,681 |
| | (3,140 | ) | | (3,126 | ) |
| Impairment of investment securities | 465 |
| | 5,381 |
| | 12,846 |
| | — |
| | — |
|
| (Gain) loss on sale of investment securities available for sale | (169 | ) | | (2,907 | ) | | (11,138 | ) | | 11 |
| | (5,152 | ) |
| Equity in earnings from real estate ventures (c) | (21,395 | ) | | (5,200 | ) | | (2,001 | ) | | (4,103 | ) | | (22,925 | ) |
| Loss on extinguishment of debt | 34,110 |
| | — |
| | — |
| | — |
| | 21,458 |
|
| Acceleration of interest expense related to debt conversion | — |
| | — |
| | — |
| | 5,205 |
| | 12,414 |
|
| Stock-based compensation expense (d) | 10,887 |
| | 10,052 |
| | 5,620 |
| | 3,251 |
| | 2,519 |
|
| Litigation settlement and judgment expense (e) | 6,591 |
| | 20,000 |
| | 20,072 |
| | 2,475 |
| | 88,106 |
|
| Impact of MSA Settlement (f) | (2,721 | ) | | 247 |
| | (4,364 | ) | | (1,419 | ) | | (11,823 | ) |
| Restructuring expense | — |
| | 41 |
| | 1,819 |
| | — |
| | — |
|
| Gain on acquisition of Douglas Elliman | — |
| | — |
| | — |
| | — |
| | (60,842 | ) |
| Reclassification of EBITDA as a result of the consolidation of Douglas Elliman (g) | — |
| | — |
| | — |
| | — |
| | 46,640 |
|
| Purchase accounting adjustments (h) | (2,102 | ) | | 5,230 |
| | 1,435 |
| | 1,478 |
| | — |
|
| Other, net | (5,064 | ) | | (3,224 | ) | | (393 | ) | | (10,273 | ) | | (4,454 | ) |
| Adjusted EBITDA | $ | 266,915 |
| | $ | 292,434 |
| | $ | 256,172 |
| | $ | 241,845 |
| | $ | 249,378 |
|
| Adjusted EBITDA attributed to non-controlling interest | (7,576 | ) | | (10,696 | ) | | (11,267 | ) | | (15,858 | ) | | (13,717 | ) |
| Adjusted EBITDA attributed to Vector Group Ltd. | $ | 259,339 |
| | $ | 281,738 |
| | $ | 244,905 |
| | $ | 225,987 |
| | $ | 235,661 |
|
| | | | | | | | | | |
| Adjusted EBITDA by Segment | | | | | | | | | |
| Tobacco | $ | 253,179 |
| | $ | 268,121 |
| | $ | 243,067 |
| | $ | 208,997 |
| | $ | 197,741 |
|
| E-cigarettes | (888 | ) | | (1,403 | ) | | (13,037 | ) | | (13,124 | ) | | (1,019 | ) |
| Real Estate (i) | 27,848 |
| | 38,716 |
| | 38,111 |
| | 56,036 |
| | 64,866 |
|
| Corporate and Other | (13,224 | ) | | (13,000 | ) | | (11,969 | ) | | (10,064 | ) | | (12,210 | ) |
| Total | $ | 266,915 |
| | $ | 292,434 |
| | $ | 256,172 |
| | $ | 241,845 |
| | $ | 249,378 |
|
| | | | | | | | | | |
| Adjusted EBITDA Attributed to Vector Group by Segment | | | | | | | | | |
| Tobacco | $ | 253,179 |
| | $ | 268,121 |
| | $ | 243,067 |
| | $ | 208,997 |
| | $ | 197,741 |
|
| E-cigarettes | (888 | ) | | (1,403 | ) | | (13,037 | ) | | (13,124 | ) | | (1,019 | ) |
| Real Estate (j) | 20,272 |
| | 28,020 |
| | 26,844 |
| | 40,178 |
| | 51,149 |
|
| Corporate and Other | (15,688 | ) | | (13,000 | ) | | (11,969 | ) | | (10,064 | ) | | (12,210 | ) |
| Total | $ | 256,875 |
| | $ | 281,738 |
| | $ | 244,905 |
| | $ | 225,987 |
| | $ | 235,661 |
|
| |
| a. | Represents income or losses recognized from changes in the fair value of the derivatives embedded in the Company's convertible debt. |
| |
| b. | Represents equity in losses (earnings) recognized from investments that the Company accounts for under the equity method. |
| |
| c. | Represents equity in 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. |
| |
| 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 Adjusted EBITDA for Douglas Elliman Realty, LLC of $26,110, $36,657, $35,740, $50,655, and $45,710 for the years ended December 31, 2017, 2016, 2015, 2014, and 2013, respectively. Amounts reported in this footnote reflect 100% of Douglas Elliman Realty, LLC's entire Adjusted EBITDA. |
| |
| j. | Includes Adjusted EBITDA for Douglas Elliman Realty, LLC less non-controlling interest of $18,431, $25,876, $25,229, $35,757, and $31,993 for the years ended December 31, 2017, 2016, 2015, 2014, and 2013, respectively. Amounts reported in this footnote have adjusted Douglas Elliman Realty, LLC's Adjusted EBITDA for non-controlling interest. |
TABLE 2
VECTOR GROUP LTD. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA
(Unaudited)
(Dollars in Thousands)
|
| | | | | | | | | | | | | | | |
| | For the three months ended |
| | December 31, 2017 | | September 30, 2017 | | June 30, 2017 | | March 31, 2017 |
| | | | | | | | |
| Net income attributed to Vector Group Ltd. | $ | 42,724 |
| | $ | 19,264 |
| | $ | 26,811 |
| | $ | (4,227 | ) |
| Interest expense | 37,539 |
| | 43,234 |
| | 46,691 |
| | 46,221 |
|
| Income tax (benefit) expense | (24,099 | ) | | 6,472 |
| | 18,827 |
| | (2,782 | ) |
| Net income attributed to non-controlling interest | 227 |
| | 1,214 |
| | 4,735 |
| | 2 |
|
| Depreciation and amortization | 4,586 |
| | 4,386 |
| | 4,613 |
| | 5,029 |
|
| EBITDA | $ | 60,977 |
| | $ | 74,570 |
| | $ | 101,677 |
| | $ | 44,243 |
|
| Change in fair value of derivatives embedded within convertible debt (a) | (9,777 | ) | | (9,437 | ) | | (8,134 | ) | | (8,571 | ) |
| Equity in (earnings) losses on long-term investments (b) | (2,058 | ) | | 303 |
| | 1,459 |
| | 1,061 |
|
| Impairment of investment securities | 286 |
| | 53 |
| | 87 |
| | 39 |
|
| Loss (gain) on sale of investment securities available for sale | 114 |
| | (96 | ) | | (37 | ) | | (150 | ) |
| Equity in earnings (losses) from real estate ventures (c) | 4,962 |
| | 47 |
| | (15,291 | ) | | (11,113 | ) |
| Loss on extinguishment of debt | — |
| | — |
| | — |
| | 34,110 |
|
| Stock-based compensation expense (d) | 2,431 |
| | 2,430 |
| | 3,020 |
| | 3,006 |
|
| Litigation settlement and judgment expense (e) | 800 |
| | 4,104 |
| | 102 |
| | 1,585 |
|
| Impact of MSA Settlement (f) | — |
| | (1,826 | ) | | — |
| | (895 | ) |
| Purchase accounting adjustments (g) | (14 | ) | | (2,345 | ) | | 144 |
| | 113 |
|
| Other, net | (1,714 | ) | | (1,821 | ) | | (848 | ) | | (1,169 | ) |
| Adjusted EBITDA | $ | 56,007 |
| | $ | 65,982 |
| | $ | 82,179 |
| | $ | 62,259 |
|
| Adjusted EBITDA attributed to non-controlling interest | (653 | ) | | (1,091 | ) | | (5,347 | ) | | (485 | ) |
| Adjusted EBITDA attributed to Vector Group Ltd. | $ | 55,354 |
| | $ | 64,891 |
| | $ | 76,832 |
| | $ | 61,774 |
|
| | | | | | | | |
| Adjusted EBITDA by Segment | | | | | | | |
| Tobacco | $ | 57,719 |
| | $ | 66,076 |
| | $ | 66,737 |
| | $ | 62,775 |
|
| E-cigarettes | (283 | ) | | (527 | ) | | (1 | ) | | (77 | ) |
| Real Estate (h) | 2,531 |
| | 3,719 |
| | 18,643 |
| | 2,955 |
|
| Corporate and Other | (3,960 | ) | | (3,286 | ) | | (3,200 | ) | | (3,394 | ) |
| Total | $ | 56,007 |
| | $ | 65,982 |
| | $ | 82,179 |
| | $ | 62,259 |
|
| | | | | | | | |
| Adjusted EBITDA Attributed to Vector Group by Segment | | | | | | | |
| Tobacco | $ | 57,719 |
| | $ | 66,076 |
| | $ | 66,737 |
| | $ | 62,775 |
|
| E-cigarettes | (283 | ) | | (527 | ) | | (1 | ) | | (77 | ) |
| Real Estate (i) | 1,878 |
| | 2,628 |
| | 13,296 |
| | 2,470 |
|
| Corporate and Other | (3,960 | ) | | (3,286 | ) | | (3,200 | ) | | (3,394 | ) |
| Total | $ | 55,354 |
| | $ | 64,891 |
| | $ | 76,832 |
| | $ | 61,774 |
|
| |
| a. | Represents income or losses recognized from changes in the fair value of the derivatives embedded in the Company's convertible debt. |
| |
| b. | Represents equity in losses (earnings) recognized from investments that the Company accounts for under the equity method. |
| |
| c. | Represents equity in 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. |
| |
| 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 $2,357, $3,772, $18,225, and $1,756 for the three months ended December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 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 $1,664, $2,663, $12,865, and $1,240 for the three months ended December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017, respectively. Amounts reported in this footnote have adjusted Douglas Elliman Realty, LLC's Adjusted EBITDA for non-controlling interest. |
