Discontinued Operations

12 Months Ended

Dec. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

On December 29, 2021, at 11:59 p.m., New York City time, the Company completed the distribution to its stockholders (including Vector common stock underlying outstanding stock options awards and restricted stock awards) of the common stock of Douglas Elliman (the “Distribution”). Each holder of Vector common stock received one share of Douglas Elliman’s common stock for every two shares of Vector common stock (including Vector common stock underlying outstanding stock option awards and restricted stock awards) held of record as of the close of business, New York City time, on December 20, 2021. In the Distribution, an aggregate of 77,720,159 shares of Douglas Elliman’s common stock were issued, with any fractional shares converted to cash and paid to applicable Vector stockholders. Prior to the Distribution, Douglas Elliman was a component of the Real Estate segment of the Company.

Following the Distribution, Douglas Elliman is a separate public company. The Company and Douglas Elliman entered into a distribution agreement (the “Distribution Agreement”) and several ancillary agreements for the purpose of accomplishing the Distribution. The Distribution Agreement includes an agreement that the Company and Douglas Elliman will provide each other with appropriate indemnities with respect to liabilities arising out of the business retained by Vector and the business transferred to Douglas Elliman by Vector. These agreements also govern the Company’s relationship with Douglas Elliman after the Distribution and provide for the allocation of employee benefit, tax and some other liabilities and obligations attributable to periods prior to, at and after the Distribution. These agreements also include arrangements with respect to transition services (the “Transition Services Agreement”). The Company entered into a Tax Disaffiliation Agreement with Douglas Elliman that governs Vector’s and Douglas Elliman’s respective rights, responsibilities and obligations with respect to taxes and tax benefits, the filing of tax returns, the control of audits and other tax matters. Douglas Elliman will be party to other arrangements with Vector and its subsidiaries.

Douglas Elliman and its eligible subsidiaries have previously joined with Vector in the filing of certain consolidated, combined, and unitary returns for state, local, and other applicable tax purposes. However, for periods (or portions thereof) beginning after the Distribution, Douglas Elliman will not join with Vector or any of its subsidiaries (as determined after the Distribution) in the filing of any federal, state, local or other applicable consolidated, combined or unitary tax returns.

Under the Tax Disaffiliation Agreement, with certain exceptions, Vector will be generally responsible for all of Douglas Elliman’s U.S. federal, state, local and other applicable income and non-income taxes for any taxable period or portion of such period ending on or before the Distribution date. Douglas Elliman will be generally responsible for all taxes that are attributable to it or one of its subsidiaries after the Distribution date. The Company paid Douglas Elliman $589 in 2022 and recorded Other expense in its consolidated statements of operations for the year ended December 31, 2022 related to the tax indemnifications.

There were no assets or liabilities of discontinued operations of Douglas Elliman as of December 31, 2023 and 2022, respectively.

The financial results of Douglas Elliman through the Distribution are presented as income from discontinued operations, net of income taxes on the Company’s consolidated statements of operations. The following table presents financial results of Douglas Elliman for the periods prior to the completion of the Distribution:


	Year Ended December 31,
	2023		2022		2021
	(Dollars in thousands, except per share amounts)
Revenues:
Real estate	$	—	$	—	$	1,344,825

Expenses:
Cost of sales	—		—		989,436

Operating, selling, administrative and general expenses	—		—		253,942



Operating income	—		—		101,447

Other expenses:
Interest expense	—		—		(164)
Equity in losses from real estate ventures	—		—		(278)
Other, net	—		—		(870)
Pretax income from discontinued operations	—		—		100,135
Income tax expense	—		—		28,016
Income from discontinued operations	—		—		72,119

Net loss from discontinued operations attributed to non-controlling interest	—		—		190

Net income from discontinued operations attributed to Vector Group Ltd.	$	—	$	—	$	72,309

The following table presents the information regarding certain components of cash flows from discontinued operations:


	Year Ended December 31,
	2023		2022		2021
	(Dollars in thousands, except per share amounts)
Depreciation and amortization	$	—	$	—	$	8,561
Non-cash lease expense	—		—		18,667



Capital expenditures	—		—		(4,106)