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Condensed Consolidating Financial Information
 3 Months Ended
Mar. 31, 2018
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Condensed Consolidating Financial Information CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The following condensed consolidating financial information has been prepared and presented pursuant to Securities and Exchange Commission (“SEC”) Regulation S-X, Rule 3-10, “Financial Statements of Guarantors and Affiliates Whose Securities Collateralize an Issue Registered or Being Registered.” Each of the subsidiary guarantors is 100% owned, directly or indirectly, by the Company, and all guarantees are full and unconditional and joint and several. The Company’s investments in its consolidated subsidiaries are presented under the equity method of accounting.
The Company and the guarantors have filed a shelf registration statement for the offering of debt securities on a delayed or continuous basis and the Company is filing this condensed consolidating financial information in connection therewith. Any such debt securities may be issued by the Company and guaranteed by the guarantors, but any such debt securities would not be guaranteed by any of the Company’s subsidiaries engaged in the real estate businesses conducted through its subsidiary New Valley.
Presented herein are Condensed Consolidating Balance Sheets as of March 31, 2018 and December 31, 2017, the related Condensed Consolidating Statements of Operations for the three months ended March 31, 2018 and 2017, and the related Condensed Consolidating Statements of Cash Flows for the three months ended March 31, 2018 and 2017 of Vector Group Ltd. (Parent/Issuer), the guarantor subsidiaries (Subsidiary Guarantors) and the subsidiaries that are not guarantors (Subsidiary Non-Guarantors).CONDENSED CONSOLIDATING BALANCE SHEETS
 
 
 
March 31, 2018
 
 
 
 
 
 
 
Subsidiary
 
 
 
Consolidated
 
Parent/
 
Subsidiary
 
Non-
 
Consolidating
 
Vector Group
 
Issuer
 
Guarantors
 
Guarantors
 
Adjustments
 
Ltd.
ASSETS:
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
182,150

 
$
26,830

 
$
73,006

 
$
—

 
$
281,986

Investment securities at fair value
114,015

 
24,801

 
—

 
—

 
138,816

Accounts receivable - trade, net
—

 
9,701

 
13,620

 
—

 
23,321

Intercompany receivables
32,563

 
—

 
—

 
(32,563
)
 
—

Inventories
—

 
91,185

 
—

 
—

 
91,185

Income taxes receivable, net
11,237

 
—

 
1,901

 
(9,562
)
 
3,576

Restricted assets
—

 
992

 
3,488

 
—

 
4,480

Other current assets
527

 
6,059

 
21,734

 
—

 
28,320

Total current assets
340,492

 
159,568

 
113,749

 
(42,125
)
 
571,684

Property, plant and equipment, net
642

 
41,194

 
43,642

 
—

 
85,478

Investments in real estate, net
—

 
—

 
24,228

 
—

 
24,228

Long-term investments ($71,019 at fair value)
87,608

 
—

 
—

 
—

 
87,608

Investments in real estate ventures
—

 
—

 
181,011

 
—

 
181,011

Investments in consolidated subsidiaries
447,686

 
—

 
—

 
(447,686
)
 
—

Restricted assets
1,505

 
1,516

 
3,980

 
—

 
7,001

Goodwill and other intangible assets, net
—

 
107,511

 
159,775

 
—

 
267,286

Prepaid pension costs
—

 
28,077

 
—

 
—

 
28,077

Other assets
12,832

 
12,529

 
21,388

 
—

 
46,749

Total assets
$
890,765

 
$
350,395

 
$
547,773

 
$
(489,811
)
 
$
1,299,122

LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Current portion of notes payable and long-term debt
$
169,135

 
$
27,006

 
$
323

 
$
—

 
$
196,464

Current portion of fair value of derivatives embedded within convertible debt
25,061

 
—

 
—

 
—

 
25,061

Current portion of employee benefits
—

 
952

 
—

 
—

 
952

Intercompany payables
—

 
762

 
31,801

 
(32,563
)
 
—

Income taxes payable, net
—

 
9,664

 
—

 
(9,562
)
 
102

Litigation accruals and current payments due under the Master Settlement Agreement
—

 
50,351

 
—

 
—

 
50,351

Other current liabilities
31,987

 
54,956

 
44,464

 
—

 
131,407

Total current liabilities
226,183

 
143,691

 
76,588

 
(42,125
)
 
404,337

Notes payable, long-term debt and other obligations, less current portion
1,042,071

 
3,002

 
360

 
—

 
1,045,433

Fair value of derivatives embedded within convertible debt
40,785

 
—

 
—

 
—

 
40,785

Non-current employee benefits
45,872

 
16,520

 
—

 
—

 
62,392

Deferred income taxes, net
(711
)
 
24,244

 
24,888

 
—

 
48,421

Other liabilities, primarily litigation accruals and payments due under the Master Settlement Agreement
1,481

 
38,688

 
51,804

 
—

 
91,973

Total liabilities
1,355,681

 
226,145

 
153,640

 
(42,125
)
 
1,693,341

Commitments and contingencies


 


 


 


 


Stockholders' (deficiency) equity attributed to Vector Group Ltd.
(464,916
)
 
124,250

 
323,436

 
(447,686
)
 
(464,916
)
Non-controlling interest
—

 
—

 
70,697

 
—

 
70,697

Total stockholders' (deficiency) equity
(464,916
)
 
124,250

 
394,133

 
(447,686
)
 
(394,219
)
Total liabilities and stockholders' deficiency
$
890,765

 
$
350,395

 
$
547,773

 
$
(489,811
)
 
$
1,299,122

CONDENSED CONSOLIDATING BALANCE SHEETS
 
 
 
December 31, 2017
 
 
 
 
 
 
 
Subsidiary
 
 
 
Consolidated
 
Parent/
 
Subsidiary
 
Non-
 
Consolidating
 
Vector Group
 
Issuer
 
Guarantors
 
Guarantors
 
Adjustments
 
Ltd.
ASSETS:
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
194,719

 
$
17,141

 
$
89,493

 
$
—

 
$
301,353

Investment securities at fair value
121,282

 
29,207

 
—

 
—

 
150,489

Accounts receivable - trade, net
—

 
15,736

 
13,745

 
—

 
29,481

Intercompany receivables
29,541

 
—

 
—

 
(29,541
)
 
—

Inventories
—

 
89,790

 
—

 
—

 
89,790

Income taxes receivable, net
22,661

 
—

 
—

 
(11,444
)
 
11,217

Restricted assets
—

 
3,052

 
7,206

 
—

 
10,258

Other current assets
20,549

 
3,429

 
17,151

 
(20,008
)
 
21,121

Total current assets
388,752

 
158,355

 
127,595

 
(60,993
)
 
613,709

Property, plant and equipment, net
696

 
42,493

 
42,327

 
—

 
85,516

Investments in real estate, net
—

 
—

 
23,952

 
—

 
23,952

Long-term investments
81,291

 
—

 
—

 
—

 
81,291

Investments in real estate ventures
—

 
—

 
188,131

 
—

 
188,131

Investments in consolidated subsidiaries
469,436

 
—

 
—

 
(469,436
)
 
—

Restricted assets
1,501

 
1,987

 
—

 
—

 
3,488

Goodwill and other intangible assets, net
—

 
107,511

 
160,197

 
—

 
267,708

Prepaid pension costs
—

 
27,697

 
—

 
—

 
27,697

Other assets
7,843

 
12,355

 
16,588

 
—

 
36,786

Total assets
$
949,519

 
$
350,398

 
$
558,790

 
$
(530,429
)
 
$
1,328,278

LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Current portion of notes payable and long-term debt
$
—

 
$
53,540

 
$
288

 
$
(20,008
)
 
$
33,820

Current portion of employee benefits
—

 
952

 
—

 
—

 
952

Intercompany payables
—

 
449

 
29,092

 
(29,541
)
 
—

Income taxes payable, net
—

 
11,542

 
2

 
(11,444
)
 
100

Litigation accruals and current payments due under the Master Settlement Agreement
—

 
12,644

 
—

 
—

 
12,644

Other current liabilities
49,088

 
62,353

 
45,682

 
—

 
157,123

Total current liabilities
49,088

 
141,480

 
75,064

 
(60,993
)
 
204,639

Notes payable, long-term debt and other obligations, less current portion
1,190,333

 
3,448

 
463

 
—

 
1,194,244

Fair value of derivatives embedded within convertible debt
76,413

 
—

 
—

 
—

 
76,413

Non-current employee benefits
45,442

 
16,800

 
—

 
—

 
62,242

Deferred income taxes, net
695

 
26,459

 
31,647

 
—

 
58,801

Other liabilities, primarily litigation accruals and payments due under the Master Settlement Agreement
1,467

 
41,315

 
20,917

 
—

 
63,699

Total liabilities
1,363,438

 
229,502

 
128,091

 
(60,993
)
 
1,660,038

Commitments and contingencies


 


 


 


 


Stockholders' (deficiency) equity attributed to Vector Group Ltd.
(413,919
)
 
120,896

 
348,540

 
(469,436
)
 
(413,919
)
Non-controlling interest
—

 
—

 
82,159

 
—

 
82,159

Total stockholders' (deficiency) equity
(413,919
)
 
120,896

 
430,699

 
(469,436
)
 
(331,760
)
Total liabilities and stockholders' deficiency
$
949,519

 
$
350,398

 
$
558,790

 
$
(530,429
)
 
$
1,328,278

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS


 
 
 
Three Months Ended March 31, 2018
 
 
 
 
 
 
 
Subsidiary
 
 
 
Consolidated
 
  Parent/  
 
Subsidiary
 
Non-
 
Consolidating
 
Vector Group
 
  Issuer  
 
Guarantors
 
Guarantors
 
Adjustments
 
        Ltd.        
Revenues
$
—

 
$
267,235

 
$
161,850

 
$
(119
)
 
$
428,966

Expenses:
 
 
 
 
 
 
 
 
 
Cost of sales
—

 
184,962

 
109,313

 
—

 
294,275

Operating, selling, administrative and general expenses
9,096

 
16,275

 
63,824

 
(119
)
 
89,076

Litigation settlement and judgment income
—

 
—

 
(2,469
)
 
—

 
(2,469
)
Management fee expense
—

 
2,877

 
—

 
(2,877
)
 
—

Operating (loss) income
(9,096
)
 
63,121

 
(8,818
)
 
2,877

 
48,084

Other income (expenses):
 
 
 
 
 
 
 
 
 
Interest expense
(45,231
)
 
(667
)
 
(49
)
 
—

 
(45,947
)
Change in fair value of derivatives embedded within convertible debt
10,567

 
—

 
—

 
—

 
10,567

Equity in losses from real estate ventures
—

 
—

 
(6,560
)
 
—

 
(6,560
)
Equity in earnings from investments
1,162

 
—

 
—

 
—

 
1,162

Equity in earnings in consolidated subsidiaries
34,421

 
—

 
—

 
(34,421
)
 
—

Net gain (loss) recognized on equity securities
1,661

 
(4,406
)
 
—

 
—

 
(2,745
)
Management fee income
2,877

 
—

 
—

 
(2,877
)
 
—

Other, net
(68
)
 
777

 
342

 
—

 
1,051

(Loss) income before provision for income taxes
(3,707
)
 
58,825

 
(15,085
)
 
(34,421
)
 
5,612

Income tax benefit (expense)
10,918

 
(15,860
)
 
2,994

 
—

 
(1,948
)
Net income (loss)
7,211

 
42,965

 
(12,091
)
 
(34,421
)
 
3,664

Net loss attributed to non-controlling interest
—

 
—

 
3,547

 
—

 
3,547

Net income (loss) attributed to Vector Group Ltd.
$
7,211

 
$
42,965

 
$
(8,544
)
 
$
(34,421
)
 
$
7,211

Comprehensive loss attributed to non-controlling interest
$
—

 
$
—

 
$
3,547

 
$
—

 
$
3,547

Comprehensive income (loss) attributed to Vector Group Ltd.
$
7,461

 
$
43,103

 
$
(8,544
)
 
$
(34,559
)
 
$
7,461

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS


 
 
 
Three Months Ended March 31, 2017
 
 
 
 
 
 
 
Subsidiary
 
 
 
Consolidated
 
  Parent/  
 
Subsidiary
 
Non-
 
Consolidating
 
Vector Group
 
  Issuer  
 
Guarantors
 
Guarantors
 
Adjustments
 
        Ltd.        
Revenues
$
—

 
$
257,573

 
$
157,754

 
$
(119
)
 
$
415,208

Expenses:
 
 
 
 
 
 
 
 
 
Cost of sales
—

 
175,754

 
100,169

 
—

 
275,923

Operating, selling, administrative and general expenses
9,235

 
18,152

 
57,011

 
(119
)
 
84,279

Litigation settlement and judgment expense
—

 
1,585

 
—

 
—

 
1,585

Management fee expense
—

 
2,767

 
—

 
(2,767
)
 
—

Operating (loss) income
(9,235
)
 
59,315

 
574

 
2,767

 
53,421

Other income (expenses):
 
 
 
 
 
 
 
 
 
Interest expense
(45,347
)
 
(868
)
 
(6
)
 
—

 
(46,221
)
Change in fair value of derivatives embedded within convertible debt
8,571

 
—

 
—

 
—

 
8,571

Loss on extinguishment of debt
(34,110
)
 
—

 
—

 
—

 
(34,110
)
Equity in earnings from real estate ventures
—

 
—

 
11,113

 
—

 
11,113

Equity in losses from investments
(1,049
)
 
(12
)
 
—

 
—

 
(1,061
)
Equity in earnings in consolidated subsidiaries
43,451

 
—

 
—

 
(43,451
)
 
—

Management fee income
2,767

 
—

 
—

 
(2,767
)
 
—

Other, net
439

 
462

 
379

 
—

 
1,280

(Loss) income before provision for income taxes
(34,513
)
 
58,897

 
12,060

 
(43,451
)
 
(7,007
)
Income tax benefit (expense)
30,286

 
(22,551
)
 
(4,953
)
 
—

 
2,782

Net (loss) income
(4,227
)
 
36,346

 
7,107

 
(43,451
)
 
(4,225
)
Net income attributed to non-controlling interest
—

 
—

 
(2
)
 
—

 
(2
)
Net (loss) income attributed to Vector Group Ltd.
$
(4,227
)
 
$
36,346

 
$
7,105

 
$
(43,451
)
 
$
(4,227
)
Comprehensive income attributed to non-controlling interest
$
—

 
$
—

 
$
(2
)
 
$
—

 
$
(2
)
Comprehensive (loss) income attributed to Vector Group Ltd.
$
(4,103
)
 
$
36,381

 
$
7,105

 
$
(43,486
)
 
$
(4,103
)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

 
 
 
Three Months Ended March 31, 2018
 
 
 
 
 
 
 
Subsidiary
 
 
 
Consolidated
 
  Parent/  
 
Subsidiary
 
Non-
 
Consolidating
 
Vector Group
 
Issuer   
 
Guarantors
 
Guarantors
 
Adjustments
 
Ltd.
Net cash provided by (used in) operating activities
$
18,670

 
$
74,867

 
$
(9,669
)
 
$
(43,154
)
 
$
40,714

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Sale of debt securities
1,999

 
—

 
—

 
—

 
1,999

Maturities of debt securities
7,810

 
—

 
—

 
—

 
7,810

Purchase of debt securities
(3,366
)
 
—

 
—

 
—

 
(3,366
)
Purchase of equity securities
(998
)
 
—

 
—

 
—

 
(998
)
Sale of equity securities
358

 
—

 
—

 
—

 
358

Maturities of equity securities
302

 
—

 
—

 
—

 
302

Investments in real estate ventures
—

 
—

 
(533
)
 
—

 
(533
)
Distributions from investments in real estate ventures
—

 
—

 
219

 
—

 
219

Increase in cash surrender value of life insurance policies
11

 
(47
)
 
—

 
—

 
(36
)
Increase in restricted assets
(4
)
 
—

 
—

 
—

 
(4
)
Investments in subsidiaries
(605
)
 
—

 
—

 
605

 
—

Capital expenditures
(5
)
 
(911
)
 
(3,071
)
 
—

 
(3,987
)
Repayments of notes receivable
20,000

 
—

 
32

 
(20,000
)
 
32

Pay downs of investment securities
446

 
—

 
—

 
—

 
446

Investments in real estate, net
—

 
—

 
(355
)
 
—

 
(355
)
Net cash provided by (used in) investing activities
25,948

 
(958
)
 
(3,708
)
 
(19,395
)
 
1,887

Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Repayments of debt
—

 
(20,422
)
 
(68
)
 
20,000

 
(490
)
Borrowings under revolver
—

 
55,170

 
—

 
—

 
55,170

Repayments on revolver
—

 
(61,728
)
 
—

 
—

 
(61,728
)
Capital contributions received
—

 
350

 
255

 
(605
)
 
—

Intercompany dividends paid
—

 
(40,119
)
 
(3,035
)
 
43,154

 
—

Dividends and distributions on common stock
(57,187
)
 
—

 
—

 
—

 
(57,187
)
Net cash used in financing activities
(57,187
)
 
(66,749
)
 
(2,848
)
 
62,549

 
(64,235
)
Net (decrease) increase in cash, cash equivalents and restricted cash
(12,569
)
 
7,160

 
(16,225
)
 
—

 
(21,634
)
Cash, cash equivalents and restricted cash, beginning of period
194,719

 
20,175

 
96,043

 
—

 
310,937

Cash, cash equivalents and restricted cash, end of period
$
182,150

 
$
27,335

 
$
79,818

 
$
—

 
$
289,303

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

 
 
 
Three Months Ended March 31, 2017
 
 
 
 
 
 
 
Subsidiary
 
 
 
Consolidated
 
  Parent/  
 
Subsidiary
 
Non-
 
Consolidating
 
Vector Group
 
Issuer   
 
Guarantors
 
Guarantors
 
Adjustments
 
Ltd.        
Net cash (used in) provided by operating activities
$
(28,282
)
 
$
95,873

 
$
7,962

 
$
(47,657
)
 
$
27,896

Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
Sale of investment securities
13,456

 
—

 
—

 
—

 
13,456

Maturities of investment securities
7,174

 
—

 
—

 
—

 
7,174

Purchase of investment securities
(14,974
)
 
—

 
—

 
—

 
(14,974
)
Purchase of long-term investments
(22,400
)
 
—

 
—

 
—

 
(22,400
)
Investments in real estate ventures
—

 
—

 
(1,436
)
 
—

 
(1,436
)
Investments in real estate, net
—

 
—

 
(70
)
 
—

 
(70
)
Increase in cash surrender value of life insurance policies
—

 
(49
)
 
—

 
—

 
(49
)
(Increase) decrease in restricted assets
(3
)
 
1,355

 
752

 
—

 
2,104

Issuance of notes receivable
—

 
—

 
(1,500
)
 
—

 
(1,500
)
Pay downs of investment securities
864

 
—

 
—

 
—

 
864

Proceeds from sale of fixed assets
—

 
2

 
—

 
—

 
2

Investments in subsidiaries
(535
)
 
—

 
—

 
535

 
—

Capital expenditures
(6
)
 
(1,096
)
 
(3,486
)
 
—

 
(4,588
)
Net cash (used in) provided by investing activities
(16,424
)
 
212

 
(5,740
)
 
535

 
(21,417
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
Proceeds from issuance of debt
850,000

 
—

 
—

 
—

 
850,000

Deferred financing costs
(19,200
)
 
—

 
—

 
—

 
(19,200
)
Repayments of debt
(835,000
)
 
(654
)
 
(43
)
 
—

 
(835,697
)
Borrowings under revolver
—

 
39,956

 
—

 
—

 
39,956

Repayments on revolver
—

 
(68,305
)
 
—

 
—

 
(68,305
)
Capital contributions received
—

 
100

 
435

 
(535
)
 
—

Intercompany dividends paid
—

 
(45,646
)
 
(2,011
)
 
47,657

 
—

Dividends and distributions on common stock
(52,358
)
 
—

 
—

 
—

 
(52,358
)
Proceeds from issuance of Vector stock
43,230

 
—

 
—

 
—

 
43,230

Net cash used in financing activities
(13,328
)
 
(74,549
)
 
(1,619
)
 
47,122

 
(42,374
)
Net (decrease) increase in cash, cash equivalents and restricted cash
(58,034
)
 
21,536

 
603

 
—

 
(35,895
)
Cash, cash equivalents and restricted cash, beginning of period
279,815

 
19,684

 
99,109

 
—

 
398,608

Cash, cash equivalents and restricted cash, end of period
$
221,781

 
$
41,220

 
$
99,712

 
$
—

 
$
362,713