Vector Group Reports First Quarter 2009 Financial Results

MIAMI--(Business Wire)--
Vector Group Ltd. (NYSE: VGR) today announced financial results for the first
quarter ended March 31, 2009.

First quarter 2009 revenues were $121.2 million, compared to $132.2 million for
2008. The Company recorded operating income of $31.2 million for 2009, compared
to operating income of $28.0 million for 2008. Net income for 2009 was $3.1
million, or $0.04 per diluted common share, compared to net income of $14.3
million, or $0.21 per diluted common share, for 2008. The results for 2009
included a one-time pre-tax gain of $5.0 million related to an exercise of an
option from the 1999 brand transaction with Philip Morris, pre-tax impairment
charges of $8.5 million on real estate investments and $1.0 million of
restructuring charges. Adjusting for these items, the Company`s net income for
2009 would have been $5.7 million, or $0.08 per diluted common share. The
results for 2008 included $12.0 million of pre-tax income from the Company`s
investment in the St. Regis hotel, which was sold in March 2008. Adjusting for
this item, the Company`s net income for 2008 would have been $7.2 million, or
$0.11 per diluted common share.

For the three months ended March 31, 2009, the Company`s conventional cigarette
business, which includes Liggett Group cigarettes and USA brand cigarettes, had
revenues of $120.9 million, compared to $131.6 million for the three months
ended March 31, 2008. Operating income was $38.4 million for the first quarter
2009, compared to $37.3 million for the first quarter of 2008. Adjusting for the
one-time gain on the brand transaction, operating income for the first quarter
of 2009 would have been $33.4 million.

Conference Call to Discuss First Quarter 2009 Results

As previously announced, the Company will host a conference call and webcast on
Tuesday, May 12, 2009 at 11:00 A.M. (ET) to discuss first quarter 2009 results.
Investors can access the call by dialing 800-859-8150 and entering 89451183 as
the conference ID number. The call will also be available via live webcast at
www.vcall.com. Webcast participants should allot extra time before the webcast
begins to register.

A replay of the call will be available shortly after the call ends on May 12,
2009 through May 26, 2009. To access the replay, dial 877-656-8905 and enter
89451183 as the conference ID number. The archived webcast will also be
available at www.vcall.com for 30 days.

Vector Group is a holding company that indirectly owns Liggett Group LLC, Vector
Tobacco Inc., and New Valley LLC. Additional information concerning the company
is available on the company`s website, www.VectorGroupLtd.com.

VECTOR GROUP LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
Unaudited

Three Months Three Months
Ended Ended
March 31, 2009 March 31, 2008

Revenues* $121,216 $132,205

Expenses:
Cost of goods sold* 72,526 80,007
Operating, selling, administrative and general expenses 21,530 24,157
Gain on brand transaction (5,000) -
Restructuring charges 1,000 -
Operating income 31,160 28,041

Other income (expenses):
Interest and dividend income 150 1,971
Interest expense (16,074) (15,253)
Change in fair value of derivatives embedded within (303) (2,444)
convertible debt
Impairment charges on investments (8,500) -
Equity (loss) income from non-consolidated real estate (995) 13,320
businesses
Other, net - (573)

Income before provision for income taxes 5,438 25,062
Income tax expense 2,338 10,755

Net income $ 3,100 $ 14,307

Per basic common share:

Net income applicable to common shares $0.04 $0.22

Per diluted common share:

Net income applicable to common shares $0.04 $0.21

Cash distributions and dividends declared per share $0.40 $0.38

*Revenues and Cost of goods sold include excise taxes of $33,712 and $40,522,
respectively.

Sard Verbinnen & Co
Paul Caminiti/Carrie Bloom/Jonathan Doorley
212-687-8080

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