New Valley LLC

6 Months Ended

Jun. 30, 2013

New Valley LLC [Abstract]

NEW VALLEY LLC

NEW VALLEY LLC

The components of “Investments in non-consolidated real estate businesses” were as follows:

	June 30, 2013		December 31, 2012
Douglas Elliman Realty LLC	$	69,974	$	65,171
Sesto Holdings	5,037		5,037
1107 Broadway	6,579		5,566
Lofts 21	900		900
Hotel Taiwana	6,313		2,658
East 68th Street	7,000		7,000
11 Beach Street	10,508		9,642
Maryland Portfolio	4,206		4,615
701 Seventh Avenue	9,888		9,307
Queens Plaza	7,350		7,350
Chrystie Street	1,992		1,973
Leroy Street	1,150		—
101 Murray Street	11,981		—
Investments in non-consolidated real estate businesses	$	142,878	$	119,219

Residential Brokerage Business. New Valley recorded income of $6,815 and $4,929 for the three months ended June 30, 2013 and 2012, respectively, associated with Douglas Elliman Realty, LLC. New Valley recorded income of $7,438 and $6,373 for the six months ended June 30, 2013 and 2012, respectively, associated with Douglas Elliman Realty, LLC. New Valley received cash distributions from Douglas Elliman Realty, LLC of $1,311 and $564 for the three months ended June 30, 2013 and 2012, respectively. New Valley received cash distributions from Douglas Elliman Realty, LLC of $2,636 and $2,889 for the six months ended June 30, 2013 and 2012, respectively. The summarized financial information of Douglas Elliman Realty, LLC is as follows:

	June 30, 2013		December 31, 2012
Cash	$	89,491	$	78,015
Other current assets	8,665		8,543
Property, plant and equipment, net	15,645		15,796
Trademarks	21,663		21,663
Goodwill	38,539		38,523
Other intangible assets, net	785		897
Other non-current assets	3,420		3,182
Notes payable - current	378		466
Other current liabilities	62,380		22,065
Notes payable - long term	283		334
Other long-term liabilities	9,420		9,614
Members' equity	105,747		134,140

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013			2012		2013			2012
Revenues	$	113,647		$	97,955	$	188,184		$	169,130
Costs and expenses	100,093			88,568		173,707			157,794
Depreciation expense	985			831		1,958			1,646
Amortization expense	55			61		111			121
Other income	261			490		403			1,232
Interest (income) expense, net	(8		)	9		(8		)	32
Income tax expense	301			269		242			323
Net income	$	12,482		$	8,707	$	12,577		$	10,446

Douglas Elliman Realty is in discussions with Prudential to redeem the approximate 20% equity interest owned by a former affiliate of Prudential.  The redemption price for such equity interest is to be determined through an appraisal process in accordance with the terms of Douglas Elliman Realty's Limited Liability Company Operating Agreement. Upon completion of the redemption, Vector will own more than 50% of Douglas Elliman Realty and will consolidate Douglas Elliman Realty accordingly.

Chelsea Eleven.  New Valley recorded equity income of $451 and $2,118 for the three and six months ended June 30, 2012, respectively, and received net distributions of $8,439 for the six months ended June 30, 2012, related to New Valley Chelsea. New Valley had no exposure to loss as a result of its investment in Chelsea as of June 30, 2013.

Hotel Taiwana. New Valley contributed additional capital of $567 in February 2013 and $3,088 in April 2013, along with contributions of additional capital by the other investment partners of Hill Street Partners LLP ("Hill"). New Valley's investment percentage did not change from year end. Hill used the contributions to purchase the remaining interest in Hotel Taiwana.

101 Murray Street. In May 2013, a subsidiary of New Valley acquired a 25% interest in a joint venture, which had the rights to acquire a 15-story building on a 31,000 square-foot lot in the Tribeca neighborhood of Manhattan, NY. The former owner will vacate the building by July 2014. The joint venture plans to build a 150-unit, luxury condominium building on the building's site. Development will begin in 2014 and is expected to be completed in September 2017.

In July 2013, the joint venture closed on the acquisition of the property. New Valley had invested $11,981 in the joint venture as of June 30, 2013 in the form of capital contributions and a loan bearing interest at 12% per annum, compounded quarterly, to the joint venture partner. New Valley contributed another $7,275 in July 2013 in the form of capital contributions and a loan, bearing interest at 12% per annum, compounded quarterly, to the same joint venture partner.

Park Lane Hotel. In July 2013, a subsidiary of New Valley acquired an 18% interest in a joint venture that has agreed to acquire the Park Lane Hotel, which is presently a 47-story, 605-key independent hotel owned and operated by the Helmsley Family Trust and Estate. The joint venture is developing plans for a hotel and luxury residential condominiums.  The development is estimated to take approximately 30 months from commencement of construction.

Consolidated real estate investments:

The components of “Investments in consolidated real estate businesses, net” were as follows:

	June 30, 2013		December 31, 2012
Escena, net	$	13,139	$	13,295
Indian Creek	10,061		—
Investment in consolidated real estate businesses, net	$	23,200	$	13,295

Investment in Escena. The components of the Company's investment in Escena are as follows:

	June 30, 2013			December 31, 2012
Land and land improvements	$	11,430		$	11,430
Building and building improvements	1,530			1,530
Other	1,403			1,374
	14,363			14,334
Less accumulated depreciation	(1,224		)	(1,039		)
	$	13,139		$	13,295

The Company recorded an operating loss of $307 and $123 for the three months ended June 30, 2013 and 2012, respectively, from Escena. The Company recorded operating income of $76 and $487 for the six months ended June 30, 2013 and 2012, respectively, from Escena.

Investment in Indian Creek. In March 2013, New Valley invested $7,616 for an approximate 80% interest in Timbo LLC ("Indian Creek") which owns a residential real estate conversion project located on Indian Creek, Florida. As a result of the 80% ownership interest, the consolidated financial statements of the Company include the balances of Indian Creek which included land and building of approximately $9,719, a line of credit of $3,570, equity interest of $4,576 and a minority interest of $1,147 as of June 30, 2013. New Valley received a distribution of $3,080 during the six months ended June 30, 2013, while $767 is payable to the minority interest shareholder as of June 30, 2013.

In May 2013, Indian Creek entered into a $8,400 line of credit for a construction loan, that bears interest at the Overnight LIBOR rate plus 250 basis points, floating, per annum. A total of $3,570 was outstanding under the facility and has been classified as a component of Notes payable on the Company's Condensed Consolidated Balance Sheet as of June 30, 2013.