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Vector Group Reports Fourth Quarter and Full Year 2008 Financial Results 

For the full year ended December 31, 2008, revenues were $565.2 million, compared to $555.4 million for 2007. The Company recorded operating income of $135.3 million for 2008, compared to operating income of $125.5 million for 2007. Net income for 2008 was $60.5 million, or $0.80 per diluted common share, compared to net income of $73.8 million, or $1.07 per diluted common share, for 2007. The results for 2008 included $12.6 million of pre-tax income from the Company's investment in the St. Regis hotel, which was sold in March 2008, a $24.3 million pre-tax gain from changes in fair value of derivatives embedded within convertible debt and pre-tax expense of $32.4 million relating to impairment charges from long-term investments, real estate and investment securities available for sale. Adjusting for these items, the Company's net income for 2008 would have been $57.8 million, or $0.85 per diluted common share. The results for 2007 included a $19.6 million pre-tax gain associated with Company's previously announced NASA litigation settlement, an $8.1 million pre-tax gain related to the exchange of notes receivable from Ladenburg Thalmann Financial Services Inc. and a charge of $6.1 million from changes in fair value of derivatives embedded within convertible debt. Adjusting for these items, the Company's net income for 2007 would have been $61.0 million, or $0.89 per diluted common share.

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