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Financial report summary
?Competition
22nd CenturyRisks
- Liggett faces intense competition in the domestic tobacco industry.
- Liggett’s business is highly dependent on the discount cigarette segment and to maintain market share, it may be required to take steps to reduce prices.
- Declining unit sales in the domestic cigarette industry could result in lower sales or higher costs for us.
- Our tobacco operations are subject to substantial and increasing legislation, regulation and taxation, which have a negative effect on revenue and profitability.
- Litigation will continue to harm the tobacco industry, including Liggett.
- Individual tobacco-related cases resulting from the Engle case could continue to harm Liggett.
- Liggett may have additional payment obligations under the MSA.
- Liggett may have additional payment obligations under its individual state settlements.
- Our tobacco business faces multiple risks in today’s economic environment. These risks have the potential to significantly affect our business operations as well as our profitability.
- New Valley is subject to risks relating to the industries in which it operates.
- In connection with the Distribution, we agreed to indemnify Douglas Elliman and Douglas Elliman agreed to indemnify us for certain liabilities, and if we are required to perform under these indemnities or if Douglas Elliman is unable to satisfy its obligations under these indemnities, our financial results could be negatively affected.
- The Distribution and related transactions may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal distribution requirements.
- Certain directors who serve on our Board of Directors currently serve as directors of Douglas Elliman following the Distribution, and ownership of shares of common stock of Douglas Elliman following the Distribution by our directors and executive officers may create, or appear to create, conflicts of interest.
- After the Distribution, certain of our executive officers do not devote their full time to Vector Group’s affairs, and the overlap may give rise to conflicts.
- If the distribution, together with certain related transactions, were to fail to qualify as a reorganization for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Internal Revenue Code of l986, as amended (“Code”), then our stockholders, we and Douglas Elliman might be required to pay substantial U.S. federal income taxes.
- We are subject to continuing contingent tax-related liabilities of Douglas Elliman following the Distribution.
- Our ability to engage in acquisitions and other strategic transactions is subject to limitations because we have agreed to certain restrictions intended to support the tax-free nature of the Distribution.
- We and our subsidiaries have a substantial amount of indebtedness and liquidity commitments.
- We have significant liquidity commitments.
- Servicing our indebtedness requires a significant amount of cash and we may not generate sufficient cash flow from our businesses to pay our substantial indebtedness.
- Our high level of debt may adversely affect our ability to satisfy our obligations.
- Changes in respect of the debt ratings of our notes may materially and adversely affect the availability, the cost and the terms and conditions of our debt.
- The Tax Act may increase the after-tax cost of debt financings.
- We are a holding company and depend on cash payments from our subsidiaries, which are subject to contractual and other restrictions, to service our debt and to pay dividends on our common stock.
- Maintaining the integrity of our computer systems and protecting confidential information and personal identifying information has become increasingly costly, as cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and results of operations.
- We depend on our key personnel.
- Failure to maintain effective internal control over financial reporting could adversely affect us.
- Our liquidity could be adversely affected by conditions in the financial markets or the negative performance of financial institutions.
- The price of our common stock may fluctuate significantly.
Management Discussion
- Our business segments were Tobacco and Real Estate for the years ended December 31, 2023 and 2022. The Tobacco segment consisted of the manufacture and sale of cigarettes. The Real Estate segment includes our investment in New Valley, which includes investments in real estate ventures and, prior to 2023, included investments in real estate.
- The accounting policies of the segments are the same as those described in the summary of significant accounting policies and can be found in Note 1 to our consolidated financial statements.
- (1)Operating income includes $18,799 of litigation settlement and judgment expense and $734 received from a litigation settlement associated with the MSA (which reduced cost of sales).