Notes Payable, Long-Term Debt and Other Obligations (Tables)

12 Months Ended

Dec. 31, 2019

Notes payable, long-term debt and other obligations

Notes payable, long-term debt and other obligations consisted of:



	December 31, 2019			December 31, 2018
Vector:
6.125% Senior Secured Notes due 2025	$	850,000		$	850,000
10.5% Senior Notes due 2026, net of unamortized discount of $3,392 and $0	551,608			325,000
5.5% Variable Interest Senior Convertible Debentures due 2020, net of unamortized discount of $5,276 and $29,465*	164,334			202,535
7.5% Variable Interest Senior Convertible Notes due 2019, net of unamortized discount of $0 and $3,359*	—			226,641

Liggett:
Revolving credit facility	34,952			28,381
Term loan under credit facility	—			2,409
Equipment loans	347			1,039
Other	30,146			30,440
Total notes payable, long-term debt and other obligations	1,631,387			1,666,445
Less:
Debt issuance costs	(24,902		)	(23,614		)
Total notes payable, long-term debt and other obligations	1,606,485			1,642,831
Less:
Current maturities	(209,269		)	(256,134		)
Amount due after one year	$	1,397,216		$	1,386,697

_____________________________


*	The fair value of the derivatives embedded within the 5.5% Variable Interest Senior Convertible Debentures ($4,999 at December 31, 2019 and $24,789 at December 31, 2018, respectively) and the 7.5% Variable Interest Senior Convertible Debentures ($6,635 at December 31, 2018) is separately classified as a derivative liability in the consolidated balance sheets.

Schedule of non-cash interest expense

A summary of non-cash interest expense associated with the amortization of the debt discount created by the embedded derivative liability associated with the Company’s variable interest senior convertible debt was as follows:



	Year Ended December 31,
	2019		2018		2017
7.5% Convertible Notes	$	2,031	$	39,845	$	23,720
5.5% Convertible Notes	16,481		15,924		13,490
Interest expense associated with embedded derivatives	$	18,512	$	55,769	$	37,210

A summary of non-cash changes in fair value of derivatives embedded within convertible debt was as follows:



	Year Ended December 31,
	2019		2018		2017
7.5% Convertible Notes	$	6,635	$	24,530	$	21,734
5.5% Convertible Notes	19,790		20,459		14,185
Gain on changes in fair value of derivatives embedded within convertible debt	$	26,425	$	44,989	$	35,919

Schedule of convertible debt

A summary of non-cash interest expense associated with the amortization of the debt discount created by the beneficial conversion feature on the Company’s variable interest senior convertible debt is as follows:



	Year Ended December 31,
	2019		2018		2017
Amortization of beneficial conversion feature:
7.5% Convertible Notes	$	1,328	$	26,049	$	15,507
5.5% Convertible Notes	4,973		4,805		4,070
Interest expense associated with beneficial conversion feature	$	6,301	$	30,854	$	19,577

The following table reconciles the fair value of derivatives embedded within convertible debt:



	7.5% Convertible Notes			5.5% Convertible Notes			Total
Balance at January 1, 2017	$	52,899		$	59,433		$	112,332
Gain from changes in fair value of embedded derivatives	(21,734		)	(14,185		)	(35,919		)
Balance at December 31, 2017	31,165			45,248			76,413
Gain from changes in fair value of embedded derivatives	(24,530		)	(20,459		)	(44,989		)
Balance at December 31, 2018	6,635			24,789			31,424
Gain from changes in fair value of embedded derivatives	(6,635		)	(19,790		)	(26,425		)
Balance at December 31, 2019	$	—		$	4,999		$	4,999

The conversion rates for all convertible debt outstanding are summarized below:



	December 31, 2019			December 31, 2018
	Conversion Price		Shares per $1,000	Conversion Price		Shares per $1,000

7.5% Convertible Notes	$	—	—	$	13.14	76.0595
5.5% Convertible Notes	$	20.27	49.3363	$	20.27	49.3363

The following table reconciles unamortized debt discount within convertible debt:



	7.5% Convertible Notes			5.5% Convertible Notes			Total
Balance at January 1, 2017	$	108,480		$	71,247		$	179,727
Amortization of embedded derivatives	(23,720		)	(13,490		)	(37,210		)
Amortization of beneficial conversion feature	(15,507		)	(4,070		)	(19,577		)
Balance at December 31, 2017	69,253			53,687			122,940
Partial redemption of 5.5% convertible notes	—			(3,493		)	(3,493		)
Amortization of embedded derivatives	(39,845		)	(15,924		)	(55,769		)
Amortization of beneficial conversion feature	(26,049		)	(4,805		)	(30,854		)
Balance at December 31, 2018	3,359			29,465			32,824
Partial redemption of 5.5% convertible notes	—			(2,735		)	(2,735		)
Amortization of embedded derivatives	(2,031		)	(16,481		)	(18,512		)
Amortization of beneficial conversion feature	(1,328		)	(4,973		)	(6,301		)
Balance at December 31, 2019	$	—		$	5,276		$	5,276

Schedule of fair value of notes payable and long-term debt

The estimated fair value of the Company’s notes payable and long-term debt were as follows:



	December 31, 2019					December 31, 2018
	Carrying Value			Fair Value		Carrying Value			Fair Value
Senior Notes	$	1,401,608		$	1,409,920	$	1,175,000		$	1,034,500
Variable Interest Senior Convertible Debt	164,334			176,289		429,176			468,704
Liggett and other	65,445			65,456		62,269			62,255
Notes payable and long-term debt	$	1,631,387	⁽¹⁾	$	1,651,665	$	1,666,445	⁽¹⁾	$	1,565,459

__________

⁽¹⁾The carrying value does not include the carrying value of the embedded derivative. See Note 18.

Schedule of scheduled maturities

Scheduled maturities of notes payable and long-term debt were as follows:



	Principal		Unamortized Discount/ (Premium)		Net
Year Ending December 31:
2020	$	214,947	$	5,276	$	209,671
2021	10,026		—		10,026
2022	10,045		—		10,045
2023	29		—		29
2024	8		—		8
Thereafter	1,405,000		3,392		1,401,608
Total	$	1,640,055	$	8,668	$	1,631,387