NEW VALLEY LLC

Residential Brokerage Business. New Valley is engaged in the real estate business and is seeking to acquire additional real estate properties and operating companies. The Company owns a 70.59% interest in Douglas Elliman and the condensed consolidated financial statements of the Company include the account balances of Douglas Elliman.

Investments in real estate ventures. New Valley also holds equity investments in various real estate projects domestically and internationally. The components of “Investments in real estate ventures” were as follows:



	March 31, 2016		December 31, 2015
10 Madison Square Park (1107 Broadway)	$	12,123	$	11,391
The Marquand (11 East 68th Street)	13,054		13,900
11 Beach Street	13,527		13,209
20 Times Square (701 Seventh Avenue)	16,024		14,985
111 Murray Street	25,387		25,567
160 Leroy Street	4,530		3,952
215 Chrystie Street	5,666		5,592
The Dutch (25-19 43rd Avenue)	1,107		1,077
Queens Plaza (23-10 Queens Plaza South)	16,553		16,177
87 Park (8701 Collins Avenue)	8,770		8,658
125 Greenwich Street	9,870		9,750
West Hollywood Edition (9040 Sunset Boulevard)	14,416		10,510
76 Eleventh Avenue	18,487		17,967
Monad Terrace	6,849		6,608
Takanasee	4,816		4,680
Condominium and Mixed Use Development	171,179		164,023

Maryland Portfolio	—		—
ST Portfolio	16,270		15,754
Apartment Buildings	16,270		15,754

Park Lane Hotel	19,835		19,697
Hotel Taiwana	7,451		7,069
Coral Beach and Tennis Club	2,702		3,159
Hotels	29,988		29,925

The Plaza at Harmon Meadow	5,526		5,449
Commercial	5,526		5,449

Other	2,070		2,017

Investments in real estate ventures	$	225,033	$	217,168

Condominium and Mixed-Use Development:

Condominium and mixed-use development investments range in ownership percentage from 3.1% to 49.5%. New Valley recorded net equity in losses of $1,183 for the three months ended March 31, 2016 from its condominium and mixed-used developments. New Valley recorded equity income of $536 for the three months ended March 31, 2015. The Company recorded $300 of equity income related to its proportionate share of the Marquand’s equity earnings from the sale of two of its units during the quarter and $236 from Chelsea Eleven for a distribution of excess amounts held back in 2012 for final expenses of the investment for the three months ended March 31, 2015.

During the three months ended March 31, 2016, New Valley made capital contributions totaling $5,077 related to ventures where New Valley previously held an investment, primarily at 20 Times Square, 160 Leroy Street, West Hollywood Edition, and Monad Terrace. For ventures where New Valley previously held an investment, New Valley contributed its proportionate share of additional capital along with contributions by the other investment partners. New Valley's direct investment percentage did not change. During the three months ended March 31, 2015, New Valley made capital contributions totaling $1,352 primarily related to 215 Chrystie Street and the Dutch. New Valley contributed its proportionate share of additional capital along with contributions by the other investment partners. New Valley's investment percentages did not change.

During the three months ended March 31, 2016, New Valley received distributions of $258 primarily related to income from marketing fees paid by 125 Greenwich Street. During the three months ended March 31, 2015, New Valley received distributions of $236 from its investment in Chelsea Eleven, which sold its last unit in 2012, for excess amounts held back in 2012 for final expenses of the investment.

New Valley's maximum exposure to loss, net of non-controlling interest, as a result of its investments in condominium and mixed-use developments was $153,669 at March 31, 2016.

New Valley capitalized $3,520 of interest expense into the carrying value of its ventures whose projects were currently under development during the three months ended March 31, 2016.

Douglas Elliman has been engaged by the developers as the sole broker or the co-broker for several of the real estate development projects that New Valley owns an interest in through its joint venture investments. Douglas Elliman had gross commissions of approximately $2,405 for the three months ended March 31, 2016 from these projects.

Apartment Buildings:

Apartment building investments range in ownership percentage from 7.6% to 16.3%. New Valley recorded equity income of $516 for the three months ended March 31, 2016, related to the ST Portfolio apartment portfolio. New Valley recorded equity losses of $48 for the three months ended March 31, 2015, primarily related to equity losses of the Maryland Portfolio. New Valley received distributions of $212 during the three months ended March 31, 2015 , primarily related to the Maryland Portfolio. New Valley has suspended its recognition of equity losses in Maryland Portfolio to the extent such losses exceed its basis. New Valley's maximum exposure to loss as a result of its investment in apartment buildings was $16,270 at March 31, 2016.

Hotels:

Hotel investments range in ownership percentage from 5.2% to 49.0%. New Valley recorded equity losses of $655 for the three months ended March 31, 2016, related to hotel operations. New Valley recorded equity losses of $747 for the three months ended March 31, 2015. New Valley made capital contributions totaling $718 for the three months ended March 31, 2016, related to the Park Lane Hotel. New Valley made capital contributions totaling $533 for the three months ended March 31, 2015, primarily related to Coral Beach and Tennis Club. New Valley's maximum exposure to loss as a result of its investments in hotels was $29,988 at March 31, 2016.

Commercial:

Commercial ventures include a contribution by New Valley of $5,931 for a 49% interest in a joint venture which purchased a shopping center, The Plaza at Harmon Meadow, in New Jersey at the end of March 2015. New Valley recorded equity income of $212 for the three months ended March 31, 2016 related to shopping center rental operations. New Valley received distributions totaling $135 for the three months ended March 31, 2016, related to Harmon Meadow. New Valley's maximum exposure to loss as a result of its investments in commercial ventures was $5,526 at March 31, 2016.

Other:

Other investments in real estate ventures relate to a 50% investment in an insurance consulting company owned by Douglas Elliman.

Real Estate Held for Sale:

The components of “Real estate held for sale, net” were as follows:



	March 31, 2016		December 31, 2015
Escena, net	$	10,714	$	10,716
Sagaponack	12,652		12,602
Real estate held for sale, net	$	23,366	$	23,318

Escena. The assets of “Escena, net” were as follows:



	March 31, 2016			December 31, 2015
Land and land improvements	$	8,907		$	8,907
Building and building improvements	1,874			1,875
Other	2,004			1,923
	12,785			12,705
Less accumulated depreciation	(2,071		)	(1,989		)
	$	10,714		$	10,716

New Valley recorded operating income of $508 and $725 for the three months ended March 31, 2016 and 2015, respectively, from Escena.

Investment in Sagaponack. In April 2015, New Valley has invested $12,502 in a residential real estate project located in Sagaponack, NY. The project is wholly owned and the balances of the project are included in the condensed consolidated financial statements of the Company. As of March 31, 2016, the assets of Sagaponack consist of land and land improvements of $12,652.