VECTOR GROUP LTD MANAGEMENT REPORT OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

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(in thousands of dollars, except per share amounts)

The MD&A and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide the reader of Vector Group Ltd.
financial statements with a narrative from our management’s perspective. Our management report is divided into the following sections:

•Overview

•Recent Developments

•Results of Operations

• Summary of real estate investments

• Cash and capital resources

Please read this discussion along with our MD&A and audited financial statements
as of and for the year ended December 31, 2021 and Notes thereto, included in
our 2021 Annual Report on Form 10-K, and our Condensed Consolidated Financial
Statements and related Notes as of and for the quarterly period ended March 31,
2022 and 2021.

Basis of Presentation

The Condensed Consolidated Financial Statements included in this Form 10-Q
present the financial position of Vector Group Ltd., a Delaware corporation, as
of March 31, 2022 and December 31, 2021 and the results of our operations for
the three months ended March 31, 2022 and 2021 giving effect to the distribution
of Douglas Elliman Inc. (the "Distribution") with the historical financial
results of Douglas Elliman reflected as discontinued operations. The cash flows
and comprehensive income related to Douglas Elliman have not been segregated and
are included in the Condensed Consolidated Statements of Cash Flows and
Condensed Consolidated Statements of Comprehensive Income, respectively, for all
periods presented. Unless otherwise indicated, the information in the Notes to
the Condensed Consolidated Financial Statements refer only to Vector Group's
continuing operations and do not include discussion of balances or activity of
Douglas Elliman.

Overview

We are a holding company and are primarily engaged in two business areas:

• Tobacco: the manufacture and sale of cigarettes at reduced prices in United States
through our Liggett Group LLC and LLC Tobacco Vector subsidiaries, and

•Real Estate: the real estate investment business through our subsidiary, New
Valley LLC, which (i) has interests in numerous real estate projects across the
United States and (ii) is seeking to acquire or invest in additional real estate
properties or projects.

Cigarettes from our tobacco subsidiaries are produced in 100 length, style and wrapper combinations. Liggett’s current brand portfolio includes:

•Eagle 20's

•Montego

•Pyramid

• Grand Prix, Liggett Select, Eva, United States and various Partner Brands and Private Labels.

The discount segment is a challenging marketplace, with consumers having less
brand loyalty and placing greater emphasis on price. Liggett's competition is
divided into two segments. The first segment consists of the three largest
manufacturers of cigarettes in the United States: Philip Morris USA Inc., which
is owned by Altria Group, Inc., RJ Reynolds Tobacco Company, which is owned by
British American Tobacco Plc, and ITG Brands LLC, which is owned by Imperial
Brands Plc. These three manufacturers, while primarily premium cigarette-based
companies, also produce and sell discount cigarettes. The second segment of
competition is comprised of a group of smaller manufacturers and importers, most
of which sell deep discount cigarettes.
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Douglas Elliman’s financial results up to the date of distribution are presented as results from discontinued operations, net of income taxes in our condensed consolidated statements of earnings and are not included in our results from continuing operations described herein. -below. See Note 4.

RECENT DEVELOPMENTS

Montego. From August 2020 to February 2022, Liggett has expanded the
distribution of its Montego deep discount brand nationally. Montego was
Liggett's second-largest brand for the three months ended March 31, 2022. Prior
to August 2020, Montego was sold in select targeted markets in four states.
Montego's unit volume represented approximately 38% for the three months ended
March 31, 2022 compared to approximately 10% of total unit volume sales for the
three months ended March 31, 2021.

Menthol and Flavorings. On May 4, 2022, FDA published a proposed rule to
prohibit menthol as a characterizing flavor in cigarettes. For the twelve months
ended March 31, 2022, approximately 19% of our cigarette unit sales were menthol
flavored. We cannot predict how a tobacco product standard or a restriction on
the sale and distribution of tobacco products with menthol, if ultimately issued
by FDA, will impact product sales, whether it will have a material adverse
effect on Liggett or Vector Tobacco, or whether it will impact Liggett and
Vector Tobacco to a greater degree than other companies in the industry.


Recent Developments in Tobacco Litigation

The cigarette industry continues to be challenged on numerous fronts. New cases
continue to be commenced against Liggett and other cigarette manufacturers.
Liggett could be subjected to substantial liabilities and bonding requirements
from litigation relating to cigarette products. Adverse litigation outcomes
could have a negative impact on our ability to operate due to their impact on
cash flows. It is possible that there could be adverse developments in pending
cases including the certification of additional class actions. An unfavorable
outcome or settlement of pending tobacco-related litigation could encourage the
commencement of additional litigation. In addition, an unfavorable outcome in
any tobacco-related litigation could have a material adverse effect on our
consolidated financial position, results of operations or cash flows. Liggett
could face difficulties in obtaining a bond to stay execution of a judgment
pending appeal.

Mississippi Litigation. In January 2016, the Attorney General for Mississippi
filed a motion in Chancery Court in Jackson County, Mississippi to enforce the
March 1996 settlement agreement among Liggett, Mississippi and other states (the
"1996 Agreement") alleging that Liggett owes Mississippi at least $27,000 in
compensatory damages and interest. In April 2017, the Chancery Court ruled, over
Liggett's objections, that the 1996 Agreement should be enforced as Mississippi
claims and referred the matter first to arbitration and then to a Special Master
for further proceedings to determine the amount of damages, if any, to be
awarded. In April 2021, following confirmation of the final arbitration award,
the parties stipulated that the unpaid principal (exclusive of interest)
purportedly due from Liggett to Mississippi pursuant to the 1996 Agreement was
approximately $16,700, subject to Liggett's right to litigate and/or appeal the
enforceability of the 1996 Agreement (and all issues other than the calculation
of the principal amount allegedly due).

In September 2019, the Special Master held a hearing regarding Mississippi's
claim for pre- and post-judgment interest. In August 2021, the Special Master
issued a final report with proposed findings and recommendations that
pre-judgment interest, in the amount of approximately $18,800, is due from
Liggett from April 2005 - August 3, 2021. In April 2022, the Mississippi
Chancery Court affirmed the Special Master's findings. Additional interest
amounts will accrue if the judgment is not overturned on appeal. Liggett
continues to assert that the April 2017 Chancery Court order is in error because
the most favored nations provision in the 1996 Agreement eliminated all of
Liggett's payment obligations to Mississippi, and has reserved all rights to
appeal this and other issues at the conclusion of the case. In the event Liggett
appeals an adverse judgment, the posting of a bond will likely be required.

Liggett may be required to make additional payments to either Mississippi or
Texas which could have a material adverse effect on our consolidated financial
position, results of operations and cash flows.

See “Laws and Regulations” in Section 2 of the MD&A for further information on litigation.


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Operating results

The following discussion provides an assessment of our results of operations,
capital resources and liquidity and should be read in conjunction with our
condensed consolidated financial statements included elsewhere in this report.
The condensed consolidated financial statements include the accounts of Liggett,
Vector Tobacco, Liggett Vector Brands, New Valley and other less significant
subsidiaries.

For purposes of this discussion and other consolidated financial reporting, our
business segments for the three months ended March 31, 2022 and 2021 were
Tobacco and Real Estate. The Tobacco segment consisted of the manufacture and
sale of cigarettes. The Real Estate segment included our investment in New
Valley, which includes Escena and investments in real estate ventures.

                                      Three Months Ended
                                          March 31,
                                                    2022              2021
Revenues:
Tobacco                                          $ 309,048         $ 268,463

Real estate                                          2,994             2,525

Total revenues                                   $ 312,042         $ 270,988
Operating income (loss):
Tobacco                                          $  77,639   (1)   $  81,599   (2)

Real estate                                            975             1,032
Corporate and Other                                 (3,488)           (6,656)
Total operating income                           $  75,126         $  75,975

(1) Operating income includes $2,123 receipt of a litigation settlement associated with the MSA (which reduced the cost of sales) and $72

settlement of disputes and costs of judgment.

(2) Operating income includes $2,722 receipt of a litigation settlement associated with the MSA (which reduced the cost of sales) and $5 of

litigation and judgment costs.

Three months completed March 31, 2022 Compared to the three months ended March 31, 2021

Revenues. Total revenues were $312,042 for the three months ended March 31, 2022
compared to $270,988 for the three months ended March 31, 2021. The $41,054
(15.1%) increase in revenues was primarily due to a $40,585 increase in Tobacco
revenues related to increased unit volume and a $469 increase in Real Estate
revenues.

Cost of sales. Total cost of sales was $212,815 for the three months ended
March 31, 2022 compared to $164,907 for the three months ended March 31, 2021.
The $47,908 (29.1%) increase in cost of sales was primarily due to a $47,506
increase in Tobacco cost of sales primarily related to increased sales volume,
and a $402 increase in Real Estate cost of sales.

Expenses. Operating expenses were $24,101 for the three months ended March 31,
2022 compared to $30,106 for the same period last year. The $6,005 (19.9%)
decline was due to a $3,168 decline in Corporate and Other expense and a $2,961
decline in Tobacco expenses. This was offset by a $124 increase in Real Estate
expenses for the three months ended March 31, 2022.

Operating income. Operating income was $75,126 for the three months ended
March 31, 2022 compared to operating income of $75,975 for the same period last
year. Tobacco operating income declined by $3,960 due primarily to declines in
net pricing and higher per unit MSA expense, while Real Estate operating income
declined $57. This was offset by a decline in Corporate and Other operating loss
of $3,168.

Other expenses. Other expenses were $30,362 for the three months ended March 31,
2022 compared to other expenses of $45,211 for the three months ended March 31,
2021. For the three months ended March 31, 2022, other expenses primarily
consisted of interest expense of $25,098, equity in losses from investments of
$2,242, equity in losses from real estate ventures of $1,877 and other expenses
of $1,145. For the three months ended March 31, 2021, other expenses primarily
consisted of interest expense of $28,721 and loss on extinguishment of debt of
$21,362. This was offset by other income of $2,706, equity in earnings from real
estate ventures $1,589 and equity in earnings from investments of $577.

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Earnings before provision for income taxes. Earnings before income taxes were $44,764
and $30,764 for the three months ended March 31, 2022 and 2021, respectively.

Income tax expense. Income tax expense was $12,222 for the three months ended
March 31, 2022 compared to income tax expense of $9,214 for the three months
ended March 31, 2021. Our provision for income taxes in interim periods is based
on expected income, statutory rates, nontaxable differences, valuation
allowances against deferred tax assets, and any tax planning opportunities
available to us. For interim financial reporting, we estimate the annual
effective income tax rate based on full year projections and apply the annual
effective income tax rate against year-to-date pretax income to record income
tax expense, adjusted for discrete items, if any. We refine annual estimates as
new information becomes available.

The tobacco.

Tobacco revenues. Liggett increased the list price of Eagle 20's, Pyramid,
Liggett Select, Eve and Grand Prix by $0.16 per pack on April 29, 2022, $0.15
per pack in January 2022, $0.15 per pack in September 2021, $0.14 per pack in
June 2021, and $0.14 per pack in January 2021. Effective May 1, 2022, Liggett
reduced its Montego promotional spending of $0.10 per pack.

All of our Tobacco sales were in the discount category in 2022 and 2021. For the
three months ended March 31, 2022, Tobacco revenues were $309,048 compared to
$268,463 for the three months ended March 31, 2021. Revenues increased by
$40,585 (15.1%) due primarily to an 18.7% (362 million units) increase in unit
sales volume, partially offset by a decline in the average selling price of our
brands. The average selling price of our brands declined due to a shift in
volume from our higher priced Eagle 20's and Pyramid brands to Montego.

Eagle 20's remains Liggett's primary discount cigarette brand and its percentage
of Liggett's total unit sales declined from 61% in the three months ended
March 31, 2021 to 41% for the three months ended March 31, 2022. Montego is now
Liggett's second largest brand and its unit volume increased from 10% of total
unit sales in the three months ended March 31, 2021 to 38% for the three months
ended March 31, 2022. Pyramid, Liggett's third largest brand, declined from 21%
of total unit volume sales in the three months ended March 31, 2021 to 16% for
the three months ended March 31, 2022.

Tobacco cost of sales. The major components of our Tobacco cost of sales were as
follows:

                                                              Three Months Ended
                                                                   March 31,
                                                            2022              2021

Manufacturing overhead, raw materials and labor $32,765 $27,261
Customer Shipping and Handling

                               1,993             1,416
Federal excise taxes, net                                  116,079            97,714

FDA expense                                                  6,624             6,072
MSA expense, net of market share exemption                  54,076   (1)      31,568   (2)
  Total cost of sales                                    $ 211,537         $ 164,031

(1) Includes $2,123 receipt of a litigation settlement associated with the MSA expense (which reduced the cost of sales).

(2) Includes $2,722 receipt of a litigation settlement associated with the MSA expense (which reduced the cost of sales).

The Tobacco segment's MSA expense is the most volume-sensitive component (on a
per-unit basis) of our cost of sales because, under the terms of the MSA, we
have no payment obligations except to the extent that our tobacco subsidiaries'
market share of the U.S. cigarette market exceeds 1.92%. We estimate MSA expense
based on total domestic taxable cigarette shipments in the United States, our
taxable shipments and inflation. Based on assumptions discussed below, we
estimated our MSA expense increased to $0.47 per pack for the three months ended
March 31, 2022 from our estimate of $0.33 per pack from the three months ended
March 31, 2021. (We estimated our MSA expense was $0.40 per pack for the year
ended December 31, 2021.)

Our MSA expense is impacted by total domestic taxable cigarette shipments in the
United States. As of March 31, 2022, we estimate taxable shipments in the U.S.
will decline by 7.0% in 2022 compared to our estimate as of March 31, 2021 of a
decline of 6.0% in 2021. (The actual change in 2021 taxable shipments was a
decline of 6.2%.) We estimate our 2022 projected annual MSA expense changes by
approximately $1,800 for each 1% change from 2021 shipment volumes in the U.S.
market.

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Inflationary pressures also impact Liggett's MSA expense, which is subject to an
annual inflation adjustment. The inflation adjustment is the greater of the U.S.
CPI rate or 3%. For the three months ended March 31, 2022, Liggett's management
assumed an inflation adjustment to MSA expense of 7% compared to an assumption
of 4% for the three months ended March 31, 2021. (The actual inflation
adjustment to the MSA in 2021 was 7%.) Our annual MSA expense increases by
approximately $2,300 for each 1% increase in inflation over 3%.

In addition to the MSA expense, we could experience inflationary impacts from
manufacturing costs. The largest component of Liggett's manufacturing costs is
leaf tobacco and other raw materials. In recent years, due to declining prices
of leaf tobacco as well as efficiencies gained from technological innovation in
Liggett's factory, Liggett's raw material costs have been relatively flat and,
therefore, prior to 2021, Liggett had not been impacted by inflation. During the
three months ended March 31, 2022, Liggett experienced a 4.1% increase in leaf
tobacco and raw materials (on a per unit basis) compared to no change in prices
during the three months ended March 31, 2021. Further, when including labor
costs, manufacturing overhead and shipping costs with leaf tobacco and raw
materials, Liggett experienced a 2.1% increase in production costs (on a per
unit basis) during the three months ended March 31, 2022, compared to a decline
in total production costs of 2.8% during the three months ended March 31, 2021.

Tobacco gross profit was $97,511 for the three months ended March 31, 2022
compared to $104,432 for the three months ended March 31, 2021, a decline of
$6,921 (6.6%). This decline in gross profit for the three months ended March 31,
2022 was primarily attributable to lower net pricing caused by a shift in volume
to Liggett's lower priced Montego brand. As a percentage of revenue (excluding
Federal Excise Taxes), Tobacco gross profit margin declined from 61.2% in the
2021 period to 50.5% in the 2022 period.

Tobacco expenses. Tobacco operating, selling, general and administrative
expenses, excluding settlements and judgments, were $19,800 for the three months
ended March 31, 2022 compared to $22,828 for the three months ended March 31,
2021. The decline of $3,028 was mainly due to lower professional fees and
expenses. Tobacco product liability legal expenses, including settlements and
judgments, were $1,645 and $1,525 for the three months ended March 31, 2022 and
2021, respectively.

Tobacco operating income. Tobacco operating income was $77,639 for the three
months ended March 31, 2022 compared to $81,599 for the three months ended
March 31, 2021. The decline of $3,960 (4.9%) was attributable to lower gross
profit partially offset by lower operating, selling, general and administrative
expenses.

Real Estate.

Real Estate revenues. Real Estate revenues were $2,994 and $2,525 for the three
months ended March 31, 2022 and 2021, respectively. Real Estate revenues
increased by $469, which was primarily related to sales on facilities from
Escena. In April 2022, New Valley sold Escena and received approximately $15,300
in net cash proceeds. We will account for the transaction in our condensed
consolidated statement of operations for the three months ended June 30, 2022.

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Revenues, cost of sales, expenses and real estate operating income for the three months ended March 31, 2022 and 2021, respectively, were as follows:

                                                                                Three Months Ended
                                                                                     March 31,
                                                                           2022                       2021
Real Estate Revenues:
Sales on facilities from Escena                                      $    2,969                   $   1,625
Revenues from investments in real estate                                     25                         900

 Total real estate revenues                                          $    2,994                   $   2,525

Cost of real estate sales:

Cost of sales on facilities from Escena                              $    1,278                   $   2,361
 Total real estate cost of sales                                     $    1,278                   $   2,361

Operating, selling, administrative and general expenses              $      741                   $     617

 Operating income                                                    $      975           1032000 $   1,032



Corporate and Other.

Corporate and Other loss. The operating loss at the Corporate and Other segment
was $3,488 for the three months ended March 31, 2022 compared to $6,656 for the
same period in 2021.

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Summary of real estate investments

We own and seek to acquire interests in various domestic and international real estate projects through debt and equity investments. Our real estate investments mainly include the following projects in March 31, 2022:

                                                                                                                                                            (Dollars in Thousands. Area and Unit Information in Ones)
                                                                                                                                                                           Future
                                                                                                                                                                          Capital
                                                                                                                                                                          Commit-                                                                                         Projected Number of
                                                                                                                           Net Cash       Cumulative    Carrying Value   ments from                                                                                        Residential Lots,      Actual/Projected
                                                                                                      Percentage Owned     Invested        Earnings     as of March 31,  New Valley                                                                                       Units and/or Hotel     Construction Start         Projected
                                                  Location              Date of Initial Investment          (1)           (Returned)       (Losses)          2022           (2)          Projected Residential and/or Hotel Area         Projected Commercial Space              Rooms                  Date          Construction End Date

                                       Master planned community, golf
                                       course, and club house in Palm                                                                                                                                                                                                           667   R Lots
Escena, net (liquidated April 2022)    Springs, CA                              March 2008                       100  % $     (1,894)   $     10,933    $      9,039    $       -               450          Acres                                                              450     H               N/A                    N/A
Investments in real estate, net                                                                                         $     (1,894)   $     10,933    

$9,039 $-

Investments in real estate ventures:
111 Murray Street                      TriBeCa, Manhattan, NY                    May 2013                        9.5  % $      7,166    $     (4,414)   $      2,752    $       -           330,000          SF                           1,700        SF                   157         R          September 2014           Completed
87 Park (8701 Collins Avenue)          Miami Beach, FL                         December 2013                    23.1  %       (6,485)          6,485               -            -           160,000          SF                             TBD                              70         R           October 2015            Completed
                                       Financial District, Manhattan,
125 Greenwich Street                   NY                                       August 2014                     13.4  %        7,992          (7,992)              -            -           306,000          SF                          16,000        SF                   273         R            March 2015                TBD
West Hollywood Edition (9040 Sunset                                                                                                                                                                                                                                              20     R
Boulevard)                             West Hollywood, CA                      October 2014                     48.5  %       17,188         (17,188)              -            -           210,000          SF                               -                                 190     H             May 2015              Completed
Monad Terrace (1300 West Ave)          Miami Beach, FL                           May 2015                       19.6  %        7,635          (7,635)              -            -           160,000          SF                               -                              59         R             May 2016              Completed
Takanasee (805 Ocean Ave)              Long Branch, NJ                         December 2015                    22.8  %        5,588          (5,588)              -            -            63,000          SF                               -                              13         R            June 2017                 TBD
Brookland (15 East 19th St)            Brooklyn, NY                             April 2017                       9.8  %           57             (57)              -            -            24,000          SF                               -                              33         R           August 2017             Completed
Dime (209 Havemeyer St)                Brooklyn, NY                            November 2017                    16.5  %        9,145          (4,817)          4,328            -           100,000          SF                         150,000        SF                   177         R             May 2017              Completed
352 6th Avenue                         Brooklyn, NY                            February 2019                    37.0  %         (394)            394               -            -             5,200          SF                               -                               4         R          September 2019           Completed
                                       Meatpacking District,
Meatpacking Plaza (44 Ninth Ave)       Manhattan, NY                            April 2019                      16.9  %       10,692          (2,906)          7,786            -             8,741          SF                           76,919       SF                    15         R            July 2021             August 2023
Five Park (500 Alton Road)             Miami Beach, FL                        September 2019                    38.9  %       18,098           2,177          20,275            -           472,000          SF                          15,000        SF                   291         R            April 2020          September 2024
9 DeKalb Avenue                        Brooklyn, NY                             April 2019                       4.2  %        5,000           1,400           6,400            -           450,000          SF                         120,000        SF                   540         R            March 2019           February 2023
Natura                                 Miami, FL                               December 2019                    77.8  %        7,354           5,450          12,804            -           460,000          SF                               -                             460         R          December 2019          November 2022
Ritz-Carlton Villas (4701 Meridian
Avenue)                                Miami Beach, FL                         December 2020                    50.0  %        4,109            (149)          3,960            -            58,000          SF                               -                              15         R           October 2020          December 2022
2000 N. Atlantic Ave.                  Daytona Beach, FL                       November 2021                    50.0  %        1,882             156           2,038            -              TBD                                                                                                      TBD                    TBD
Society Nashville (915 Division St)    Nashville, TN                           November 2021                    89.1  %       19,500           1,782          21,282            -           320,000          SF                           8,000        SF                   472         R            July 2022           September 2024
3621 Collins Ave (3)                   Miami Beach, FL                          March 2022                       2.5  %        1,000               -           1,000                           TBD                                                                                                      TBD                    TBD
Condominium and Mixed Use Development                                                                                   $    115,527    $    (32,902)   $     82,625    $       -

Riverchase Landing                     Hoover, AL                              October 2021                     50.0  % $     11,700    $       (309)   $     11,391    $       -            746,000         SF                             N/A                             468         R               N/A                    N/A
Apartment Buildings                                                                                                     $     11,700    $       (309)   $     11,391    $       -

Park Lane Hotel (36 Central Park       Central Park South, Manhattan,
South)                                 NY                                      November 2013                     1.0  % $      8,682    $     (7,855)   $        827    $       -           446,000          SF                               -                             628         H               N/A                    N/A
215 Chrystie Street (4)                Lower East Side, Manhattan, NY          December 2012                    12.3  %       (1,484)          1,327            (157)           -           246,000          SF                               -                             367         H            June 2014              Completed
Coral Beach and Tennis Club            Coral Beach, Bermuda                    December 2013                    49.0  %        6,048          (4,789)          1,259            -                52          Acres                            -                             101         H               N/A                    N/A
                                                                                                                                                                                                                                                                                587     H
Parker New York (119 W 56th St)        Midtown, Manhattan, NY                    July 2019                       0.4  %        1,000            (480)            520            -            470,000         SF                               -                                  99     R             May 2020            December 2022
Hotels                                                                                                                  $     14,246    $    (11,797)   $      2,449    $       -

The Plaza at Harmon Meadow             Secaucus, NJ                             March 2015                      49.0  % $     12,270    $     (4,200)   $      8,070    $       -                 -          -                          219,000        SF                     -         -               N/A                   N /A
Wynn Las Vegas Retail                  Las Vegas, NV                           December 2016                     1.6  %        3,945           3,499           7,444            -                 -          -                          160,000        SF                     -         -               N/A                    N/A
Commercial                                                                                                              $     16,215    $       (701)   $     15,514    $       -

Witkoff GP Partners (5)                Multiple                                 March 2017                      15.0  % $      9,986    $     (9,619)   $        367    $       -              N/A                                          N/A                             N/A                         N/A                    N/A
1 QPS Tower (23-10 Queens Plaza South) Long Island City, NY                    December 2012                    45.4  %      (14,406)         14,406               -            -              N/A                                          N/A                             N/A                      March 2014             Completed
Witkoff EB-5 Capital Partners          Multiple                               September 2018                    49.0  %       (1,041)          1,041               -            -              N/A                                          N/A                             N/A                         N/A                    N/A
Diverse Real Estate Portfolio                                                                                           $     (5,461)   $      5,828    $        367    $       -

Investments in real estate ventures                                                                                     $    152,227    $    (39,881)   $    112,346    $       -

Total Carrying Value                                                                                                    $    150,333    $    (28,948)   $    121,385    $       -

(1) Ownership percentage reflects our estimated current ownership percentage. Our actual percentage of ownership as well as the percentage of earnings and cash distributions may ultimately differ due to a number of factors, including potential dilution, financing or admission of additional partners.

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(2) This column only represents capital commitments required under the various joint venture agreements. However, many of the operating agreements
provide for the operating partner to call capital. If a joint venture partner, such as New Valley, declines to fund the capital call, then the partner's
ownership percentage could either be diluted or, in some situations, the character of a funding member's contribution would be converted from a capital
contribution to a member loan.
(3) The 3621 Collins Ave venture is measured at cost, less impairment, following the guidance under ASC 821. The investment is included in Other Assets
on the condensed consolidated balance sheets.
(4) Equity in losses in excess of the joint ventures' carrying value were $157 as of March 31, 2022, and are classified in Other current liabilities.
(5) The Witkoff GP Partners venture includes a $367 investment in 500 Broadway, a Condominium and Mixed Use Development in Santa Monica, CA.
                                                                 TBD -To be         R - Residential
N/A - Not applicable   SF - Square feet  H - Hotel rooms         determined         Units              R Lots - Residential lots


New Valley capitalizes net interest expense into the carrying value of its
ventures whose projects were under development. Net capitalized interest costs
included in Carrying Value as of March 31, 2022 were $12,353. This amount is
included in the "Cumulative Earnings (Losses)" column in the table above. During
the three months ended March 31, 2022, New Valley capitalized $3,716 of interest
costs and utilized (reversed) $20 of previously capitalized interest in
connection with the recognition of equity in (losses) earnings, gains and
liquidations from various ventures.


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Cash and capital resources

Cash, cash equivalents and restricted cash increased by $44,894 and $29,407 for the three months ended March 31, 2022 and 2021, respectively.

Cash provided by operations was $74,796 and $78,364 for the three months ended
March 31, 2022 and 2021, respectively. The decline in cash provided from
operations related primarily to the absence of cash from operations from Douglas
Elliman for the three months ended March 31, 2022 as a result of the
Distribution and changes in working capital (other than our MSA liability) as a
result of additional payments of liabilities and a higher increase in accounts
receivable (due to increased revenues) for the three months ended March 31, 2022
compared to the three months ended March 31, 2021. The amounts were offset by
increased obligations due under the MSA (due to increased unit volumes) for the
three months ended March 31, 2022 as well as the absence, in 2022, of premiums
paid during the three months ended March 31, 2021 to retire our 6.125% Senior
Secured Notes due 2025.

Cash provided by investing activities was $2,705 for the three months ended
March 31, 2022 and cash used in investing activities was $18,505 for the three
months ended March 31, 2021. In the first three months of 2022, cash provided by
investing activities was from the sale of investment securities of $16,933,
maturities of investment securities of $21,105, distributions from investments
in real estate ventures of $3,310, and paydowns of investment securities of $63.
This was offset by the purchase of investment securities of $27,231, investments
in real estate ventures of $8,488, capital expenditures of $1,222, an increase
in cash surrender value of life insurance policies of $765, and purchase of
long-term investments of $1,000. In the first three months of 2021, cash used in
investing activities was for the purchase of investment securities of $38,441,
investments in real estate ventures of $8,087, capital expenditures of $1,931,
an increase in cash surrender value of life insurance policies of $564, purchase
of long-term investments of $5,813, and an increase in restricted assets of $3.
This was offset by the sale of investment securities of $10,228, paydowns of
investment securities of $172, maturities of investment securities of $13,968,
distributions from investments in real estate ventures of $7,577, and proceeds
from the sale or liquidation of long-term investments of $4,389.

Cash used in financing activities was $32,607 and $30,452 for the three months
ended March 31, 2022 and 2021, respectively. In the first three months of 2022,
cash was used for the dividends on common stock of $31,658, repayments of debt
of $11, and other of $938. In the first three months of 2021, cash used in
financing activities consisted primarily of dividends and distributions on
common stock of $32,273 and was offset by net impact of the refinancing of our
Senior Secured Notes. The refinancing consisted of proceeds of $875,000 from the
issuance of our 5.75% Senior Secured Notes due 2029 offset by deferred financing
costs of $20,000 and the retirement of our 6.125% Senior Secured Notes due 2025
of $850,000. In addition, cash used in financing activities in the 2021 period
consisted of additional debt retirements of $3,158.

We use dividends from our tobacco and real estate subsidiaries, as well as cash
and cash equivalents maintained at the corporate level, to fund our significant
liquidity commitments at the corporate level (not including our tobacco and real
estate operations). These liquidity commitments include cash interest expense of
approximately $108,600, dividends on our outstanding common shares of
approximately $128,800, which is based on an assumed quarterly cash dividend of
$0.20 per share, and other corporate expenses and income taxes.

As of March 31, 2022, we had cash and cash equivalents of $238,305 (including
$45,572 of cash at Liggett), investment securities and long-term investments,
which were carried at $183,137 (see Note 6 to condensed consolidated financial
statements). As of March 31, 2022, our investments in real estate ventures were
carried at $111,503 and our investment in real estate, net of accumulated
depreciation, was carried at $9,039.

Limitation of interest expense deductible for income taxes. Since 2018, the
amount of interest expense that is deductible in the computation of income tax
liability has been limited to a percentage of adjusted taxable income, as
defined by applicable law. In 2019 and 2020, the amount of deductible interest
expense was limited to 50% of taxable income before interest, depreciation and
amortization and, in 2021, the amount was limited to 30% of taxable income
before interest, depreciation and amortization. In 2022, the amount is limited
to 30% of taxable income before interest. However, interest expense allocable to
a designated excepted trade or business is not subject to limitation. One such
excepted trade or business is any electing real property trade or business, for
which portions of our real estate businesses may qualify. If any interest
expense is disallowed, we are permitted to carry forward the disallowed interest
expense indefinitely. As a result of interest expense that is allocated to our
real estate businesses (from the holding company) not being subject to the
limitation, all of our interest expense to date has been tax deductible;
however, after the Distribution, the allocation of interest expense to our real
estate business is expected to decline. Without the benefit of such an excepted
trade or business, a portion of our interest expense in future years may not be
deductible, which may increase the after-tax cost of any new debt financings as
well as the refinancing of our existing debt.

Tobacco Litigation. As of March 31, 2022, 16 verdicts were entered in Engle
progeny cases against Liggett. Several of these verdicts have been affirmed on
appeal and have been satisfied by Liggett. Liggett has paid $40,111, including
interest and attorney's fees, to satisfy the final judgments entered against it.
It is possible that additional cases could be decided unfavorably.

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Notwithstanding the comprehensive nature of the Engle Progeny Settlements of
more than 5,200 cases, approximately 25 plaintiffs' claims remain outstanding.
Therefore, we and Liggett may still be subject to periodic adverse judgments
that could have a material adverse effect on our consolidated financial
position, results of operations and cash flows.

In addition, Liggett may be required to make additional payments, including posting a bond to appeal any unfavorable judgments, related to the Mississippi
litigation that could have a material adverse effect on the Company’s consolidated financial position, results of operations and cash flows. See Recent Developments in Dispute.

Management cannot predict the cash requirements related to any future
settlements or judgments, including cash required to bond any appeals, and there
is a risk that those requirements will not be able to be met. Management is
unable to make a reasonable estimate of the amount or range of loss that could
result from an unfavorable outcome of the cases pending against Liggett or the
costs of defending such cases. It is possible that our consolidated financial
position, results of operations or cash flows could be materially adversely
affected by an unfavorable outcome in any such tobacco-related litigation.

Vector debt.

6.125% Senior Secured Notes. On February 1, 2021, the 6.125% Senior Secured
Notes due 2025 were redeemed in full and we recorded a loss on the
extinguishment of debt of $21,362 for the three months ended March 31, 2021,
including $13,013 of premium and $8,349 of other costs and non-cash interest
expense related to the recognition of previously unamortized deferred finance
costs.

5.75% Senior Secured Notes due 2029. On January 28, 2021, we completed the sale
of $875,000 in aggregate principal amount of our 5.75% Senior Secured Notes due
2029 ("5.75% Senior Secured Notes") to qualified institutional buyers and
non-U.S. persons in a private offering pursuant to the exemptions from the
registration requirements of the Securities Act of 1933, as amended, (the
"Securities Act") contained in Rule 144A and Regulation S thereunder. The
aggregate net cash proceeds from the sale of the 5.75% Senior Secured Notes were
approximately $855,500 after deducting the initial purchaser's discount and
estimated expenses and fees in connection with the offering. We used the net
cash proceeds from the 5.75% Senior Secured Notes offering, together with cash
on hand, to redeem all of our outstanding 6.125% Senior Secured Notes due 2025,
including accrued interest and premium thereon, on January 28, 2021.

The 5.75% Senior Secured Notes pay interest on a semi-annual basis at a rate of
5.75% per year and mature on the earlier of February 1, 2029 and the date that
is 91 days before the final stated maturity date of our 10.5% Senior Notes due
2026 ("10.5% Senior Notes") if such 10.5% Senior Notes have not been repurchased
and cancelled or refinanced by such date. Prior to February 1, 2024, we may
redeem some or all of the 5.75% Senior Secured Notes at any time at a make-whole
redemption price. On or after February 1, 2024, we may redeem some or all of the
5.75% Senior Secured Notes at a premium that will decline over time, plus
accrued and unpaid interest, if any, to the redemption date. In addition, any
time prior to February 1, 2024, we may redeem up to 40% of the aggregate
outstanding amount of the 5.75% Senior Secured Notes with the net proceeds of
certain equity offerings at 105.75% of the aggregate principal amount of the
5.75% Senior Secured Notes, plus accrued and unpaid interest, if any, to the
redemption date, if at least 60% of the aggregate principal amount of the 5.75%
Senior Secured Notes originally issued remains outstanding after such
redemption, and the redemption occurs within 90 days of the closing of such
equity offering. In the event of a change of control, as defined in the
indenture governing the 5.75% Senior Secured Notes (the "2029 Indenture"), each
holder of the 5.75% Senior Secured Notes may require us to repurchase some or
all of our 5.75% Senior Secured Notes at a repurchase price equal to 101% of
their aggregate principal amount plus accrued and unpaid interest, if any, to
the date of purchase. If we sell certain assets and do not apply the proceeds as
required pursuant to the 2029 Indenture, we must offer to repurchase the 5.75%
Senior Secured Notes at the prices listed in the 2029 Indenture.

The 5.75% Senior Secured Notes are fully and unconditionally guaranteed, subject
to certain customary automatic release provisions, on a joint and several basis
by all of our wholly-owned domestic subsidiaries that are engaged in the conduct
of our cigarette businesses, which subsidiaries, as of the issuance date of the
5.75% Senior Secured Notes, were also guarantors under our outstanding 10.5%
Senior Notes. The 5.75% Senior Secured Notes are not guaranteed by New Valley
LLC, or any of our subsidiaries engaged in our real estate business conducted
through our subsidiary, New Valley LLC. The guarantees provided by certain of
the guarantors are secured by first priority or second priority security
interests in certain collateral of such guarantors pursuant to security and
pledge agreements, subject to certain permitted liens and exceptions as further
described in the 2029 Indenture and the security documents relating thereto.
Vector Group Ltd. does not provide any security for the 5.75% Senior Secured
Notes.

The 2029 Indenture contains covenants that restrict the payment of dividends if
our consolidated earnings before interest, taxes, depreciation and amortization
("Consolidated EBITDA"), as defined in the 2029 Indenture, for the most recently
ended four full quarters is less than $75,000. The 2029 Indenture also restricts
the incurrence of debt if our Leverage Ratio and our Secured Leverage Ratio,
each as defined in the 2029 Indenture, exceed 3.0 to 1.0 and 1.5 to 1.0,
respectively. Our Leverage Ratio is defined in the 2029 Indenture as the ratio
of our and our guaranteeing subsidiaries' total debt less the fair market value
of our cash, investment securities and long-term investments to Consolidated
EBITDA, as defined in the 2029 Indenture. Our Secured Leverage Ratio is defined
in the 2029 Indenture in the same manner as the Leverage Ratio, except that
secured

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indebtedness replaces indebtedness. The following table summarizes the requirements of these financial tests and the extent to which we would have met these requirements had the 2029 Indenture been in effect as of
March 31, 2022.

                                          Indenture       March 31,
              Covenant                   Requirement        2022
Consolidated EBITDA, as defined            $75,000        $408,772
Leverage ratio, as defined                <3.0 to 1       2.42 to 1

Secured leverage ratio, as defined

From March 31, 2022we were in compliance with all covenants related to the 2029 trust indenture.

10.5% Senior Notes due 2026. In 2018 and 2019, we sold $325,000 and $230,000,
respectively, in aggregate principal amount of our 10.5% Senior Notes to
qualified institutional buyers and non-U.S. persons pursuant to the exemptions
from the registration requirements of the Securities Act contained in Rule 144A
and Regulation S thereunder. The 10.5% Senior Notes were fully and
unconditionally guaranteed subject to certain customary automatic release
provisions on a joint and several basis by all of our wholly-owned domestic
subsidiaries that are engaged in the conduct of our cigarette businesses.

The 10.5% Senior Notes pay interest on a semi-annual basis at a rate of 10.5%
per year and mature on November 1, 2026. We may presently redeem such bonds at
price of 105.25% and the redemption price declines to 102.625% on November 1,
2022 and 100% on November 1, 2023. In addition, in the event of a change of
control, as defined in the indenture governing the 10.5% Senior Notes (the "2026
Indenture"), each holder of the 10.5% Senior Notes may require us to make an
offer to repurchase some or all of our 10.5% Senior Notes at a repurchase price
equal to 101% of their aggregate principal amount plus accrued and unpaid
interest, if any, to the date of purchase. If we sell certain assets and do not
apply the proceeds as required pursuant to the 2026 Indenture, we must offer to
repurchase the 10.5% Senior Notes at the prices listed in the 2026 Indenture.

The indenture governing our 10.5% Senior Notes contains covenants that restrict
the payment of dividends and certain other distributions subject to certain
exceptions, including exceptions for (1) dividends and other distributions in an
amount up to 50% of our consolidated net income, plus certain specified proceeds
received by us, if no event of default has occurred, and we are in compliance
with a Fixed Charge Coverage Ratio (as defined in the indenture to our 10.5%
Senior Notes) of at least 2.0 to 1.0, and (2) dividends and other distributions
in an unlimited amount, if no event of default has occurred and we are in
compliance with a Net Leverage Ratio (as defined in the indenture to our 10.5%
Senior Notes) no greater than 4.0 to 1.0. As a result, absent an event of
default, we can pay dividends if the Net Leverage ratio is below 4.0 to 1.0,
regardless of the value of the Fixed Charge Coverage Ratio at the time. The
indenture to our 10.5% Senior Notes also restricts our ability to incur debt if
our Fixed Charge Coverage Ratio is less than 2.0 to 1.0, and restricts our
ability to secure debt to the extent doing so would cause our Secured Leverage
Ratio (as defined in the indenture to our 10.5% Senior Notes) to exceed 3.75 to
1.0, unless our 10.5% Senior Notes are secured on an equal and ratable basis.
Our Fixed Charge Coverage Ratio is defined in the indenture to our 10.5% Senior
Notes as the ratio of our Consolidated EBITDA to our Fixed Charges (each as
defined in the indenture to our 10.5% Senior Notes). Our Net Leverage Ratio is
defined in the indenture as the ratio of our and our guaranteeing subsidiaries'
total debt less our cash, cash equivalents, and the fair market value of our
investment securities, long-term investments, investments in real estate, net,
and investments in real estate ventures, to Consolidated EBITDA, as defined in
the indenture to our 10.5% Senior Notes. Our Secured Leverage Ratio is defined
in the indenture to our 10.5% Senior Notes as the ratio of our and our
guaranteeing subsidiaries' total secured debt, to Consolidated EBITDA, as
defined in the indenture to our 10.5% Senior Notes.

The following table summarizes the requirements of these financial tests and the extent to which we have met these requirements at March 31, 2022.

                                                                         March 31,
                Covenant                      Indenture Requirement        2022
Consolidated EBITDA, as defined                        N/A               

$347,184

Fixed charge coverage ratio, as defined             >2.0 to 1            3.16 to 1
Net leverage ratio, as defined                      <4.0 to 1            2.5 to 1
Secured leverage ratio, as defined                 <3.75 to 1            

2.47 to 1

From March 31, 2022we were in compliance with all covenants related to the 2026 trust indenture.

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Guarantor Summarized Financial Information. Vector Group Ltd. (the "Issuer") and
its wholly-owned domestic subsidiaries that are engaged in the conduct of its
cigarette business (the "Subsidiary Guarantors") have filed a shelf registration
statement for the offering of debt and equity securities on a delayed or
continuous basis and we are including this condensed consolidating financial
information in connection therewith. Any such debt securities may be issued by
us and guaranteed by our Subsidiary Guarantors. New Valley and any of its
subsidiaries (the "Nonguarantor Subsidiaries") will not guarantee any such debt
securities. Both the Subsidiary Guarantors and the Nonguarantor Subsidiaries are
wholly-owned by the Issuer. The Condensed Consolidating Balance Sheet as of
March 31, 2022 and the related Condensed Consolidating Statements of Operations
for the three months ended March 31, 2022 of the Issuer, Subsidiary Guarantors
and Nonguarantor Subsidiaries are set forth in Exhibit 99.2.

Presented herein are the Summarized Combined Balance Sheets as of March 31, 2022
and December 31, 2021 and the related Summarized Combined Statements of
Operations for the three months ended March 31, 2022 for the Issuer and the
Subsidiary Guarantors (collectively, the "Obligor Group"). The summarized
combined financial information is presented after the elimination of: (i)
intercompany transactions and balances among the Obligor Group, and (ii) equity
in earnings from and investments in the Nonguarantor Subsidiaries.


Summarized combined balance sheets:

                                                               March 31,               December 31,
                                                                 2022                      2021
Assets:
Current assets                                            $        505,607          $        487,797
Noncurrent assets                                                  270,874                   274,292
Intercompany receivables from Nonguarantor
Subsidiaries                                                         2,302                     1,832

Liabilities:
Current liabilities                                                224,200                   194,097
Noncurrent liabilities                                           1,525,770                 1,536,792

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