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New Valley LLC
 6 Months Ended
Jun. 30, 2020
Real Estate [Abstract]  
New Valley LLC NEW VALLEY LLC

Investments in real estate ventures:

The components of “Investments in real estate ventures” were as follows:
 
Range of Ownership (1)
 
June 30, 2020
 
December 31, 2019
Condominium and Mixed Use Development:
 
 
 
 
 
            New York City Standard Metropolitan Statistical Area (“SMSA”)
3.1% - 49.5%
 
$
42,851

 
$
51,078

            All other U.S. areas
15.0% - 77.8%
 
47,172

 
55,842

 
 
 
90,023

 
106,920

Hotels:
 
 
 
 
 
            New York City SMSA
1.0% - 18.4%
 
3,107

 
2,462

            International
49.0%
 
1,610

 
2,161

 
 
 
4,717

 
4,623

Commercial:
 
 
 
 
 
            New York City SMSA
49.0%
 
2,076

 
1,852

            All other U.S. areas
1.6%
 
7,567

 
7,634

 
 
 
9,643

 
9,486

 
 
 
 
 
 
Other:
15.0% - 49.0%
 
10,994

 
10,527

Investments in real estate ventures
 
 
$
115,377

 
$
131,556

______________________
(1) The Range of Ownership reflects New Valley’s estimated current ownership percentage. New Valley’s actual ownership percentage as well as the percentage of earnings and cash distributions may ultimately differ as a result of a number of factors including potential dilution, financing or admission of additional partners.

Contributions:

The components of New Valley’s contributions to its investments in real estate ventures were as follows:
 
Six Months Ended
 
June 30,
 
2020
 
2019
Condominium and Mixed Use Development:
 
 
 
            New York City SMSA
$
1,169

 
$
21,537

            All other U.S. areas
2,161

 
—

 
3,330

 
21,537

Apartment Buildings:
 
 
 
            All other U.S. areas
76

 
—

 
76

 
—

 
 
 
 
Hotels:
 
 
 
            New York City SMSA
—

 
172

 
—

 
172

 
 
 
 
Other:
452

 
199

Total contributions
$
3,858

 
$
21,908



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 during the six months ended June 30, 2020 and June 30, 2019. New Valley’s direct investment percentage for these ventures did not significantly change. 

Distributions:

The components of distributions received by New Valley from its investments in real estate ventures were as follows:
 
Six Months Ended
 
June 30,
 
2020
 
2019
Condominium and Mixed Use Development:
 
 
 
            New York City SMSA
$
1,735

 
$
571

            All other U.S. areas
5,214

 
1,279

 
6,949

 
1,850

Apartment Buildings:
 
 
 
            All other U.S. areas
—

 
3

 
—

 
3

Hotels:
 
 
 
            New York City SMSA
—

 
21,572

 
—

 
21,572

Commercial:
 
 
 
            New York City SMSA
3

 
9

            All other U.S. areas
52

 
129

 
55

 
138

 
 
 
 
Other
23

 
1,697

Total distributions
$
7,027

 
$
25,260



Of the distributions received by New Valley from its investment in real estate ventures, $1,855 and $2,060 were from distributions of earnings for the six months ended June 30, 2020 and 2019, respectively, and $5,172 and $23,200 were a return of capital for the six months ended June 30, 2020 and 2019, respectively. Distributions from earnings are included in cash from operations in the condensed consolidating statements of cash flows, while distributions that are returns of capital are included in cash flows from investing activities in the condensed consolidating statements of cash flows.

Equity in (Losses) Earnings from Real Estate Ventures:

New Valley recognized equity in (losses) earnings from real estate ventures as follows:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2020
 
2019
 
2020
 
2019
Condominium and Mixed Use Development:
 
 
 
 
 
 
 
            New York City SMSA
$
(5,104
)
 
$
(1,120
)
 
$
(8,451
)
 
$
(3,226
)
            All other U.S. areas (1)
(6,489
)
 
(2,258
)
 
(9,288
)
 
(2,366
)
 
(11,593
)
 
(3,378
)
 
(17,739
)
 
(5,592
)
Apartment Buildings:
 
 
 
 
 
 
 
            All other U.S. areas
(76
)
 
3

 
(76
)
 
3

 
(76
)
 
3

 
(76
)
 
3

Hotels:
 
 
 
 
 
 
 
            New York City SMSA (1)
(542
)
 
8,942

 
(649
)
 
8,234

            International
(90
)
 
122

 
(551
)
 
(364
)
 
(632
)
 
9,064

 
(1,200
)
 
7,870

Commercial:
 
 
 
 
 
 
 
            New York City SMSA
301

 
384

 
227

 
263

            All other U.S. areas
(264
)
 
79

 
(15
)
 
371

 
37

 
463

 
212

 
634

 
 
 
 
 
 
 
 
Other:
4

 
239

 
38

 
1,037

Equity in (losses) earnings from real estate ventures
$
(12,260
)
 
$
6,391

 
$
(18,765
)
 
$
3,952


______________________
(1) The Company recognized a liability, classified in Other current liabilities, of $2,498 as a result of recording equity in losses in excess of the joint ventures' carrying value.

During the six months ended June 30, 2019, New Valley’s Park Lane joint venture sold 80.0% of its interest in the Park Lane Hotel, a hotel located in the New York City SMSA. New Valley recognized equity in earnings of $10,328 from the sale and received distributions of $20,788 for the six months ended June 30, 2019. The sale reduced New Valley’s direct ownership percentage of the Park Lane Hotel from 5.2% to 1.0%. New Valley continues to account for its investment in the joint venture under the equity method of accounting because its ownership percentage in its direct investment continues to meet the threshold for equity method accounting.
As part of the Company’s ongoing assessment of the carrying values of its investments in real estate ventures, the Company determined that the fair value of a New York City SMSA Condominium and Mixed Use Development venture was less than its carrying value as of June 30, 2020. The Company determined that the impairment was other than temporary. The Company recorded an impairment charge as a component of equity in losses from real estate ventures of $3,784 for the three and six months ended June 30, 2020.

As part of the Company’s ongoing assessment of the carrying values of its investments in real estate ventures, the Company determined that the fair value of three New York City SMSA and one All other U.S. areas Condominium and Mixed Use Development ventures were less than their carrying value as of June 30, 2019. The Company determined that the impairment was other than temporary. The Company recorded an impairment charge as a component of equity in earnings from real estate ventures of $3,866 for the three and six months ended June 30, 2019.

VIE Consideration:

The Company has determined that New Valley is the primary beneficiary of two real estate ventures because it controls the activities that most significantly impact economic performance of each of the two real estate ventures. Consequently, New Valley consolidates these variable interest entities (“VIEs”).

The carrying amount of the consolidated assets of the VIEs was $0 and $897 as of June 30, 2020 and December 31, 2019, respectively. Those assets are owned by the VIEs, not the Company. Neither of the two consolidated VIEs had recourse liabilities as of June 30, 2020 and December 31, 2019. A VIE’s assets can only be used to settle obligations of that VIE. The VIEs are not guarantors of the Company’s senior notes and other debts payable.

For the remaining investments in real estate ventures, New Valley determined that the entities were VIEs but New Valley was not the primary beneficiary. Therefore, New Valley’s investment in such real estate ventures has been accounted for under the equity method of accounting.

Maximum Exposure to Loss:

New Valley’s maximum exposure to loss from its investments in real estate ventures consisted of the net carrying value of the venture adjusted for any future capital commitments and/or guarantee arrangements. The maximum exposure to loss was as follows:
 
June 30, 2020
Condominium and Mixed Use Development:
 
            New York City SMSA
$
42,851

            All other U.S. areas
47,172

 
90,023

Hotels:
 
            New York City SMSA
3,107

            International
1,610

 
4,717

Commercial:
 
            New York City SMSA
2,076

            All other U.S. areas
7,567

 
9,643

 
 
Other:
24,641

Total maximum exposure to loss
$
129,024


New Valley capitalized $1,004 and $2,257 of interest costs into the carrying value of its ventures whose projects were currently under development for the three and six months ended June 30, 2020. New Valley capitalized $1,688 and $3,003 of interest costs into the carrying value of its ventures whose projects were currently under development for the three and six months ended June 30, 2019.
 
Douglas Elliman is engaged by certain developers as a broker for several of the real estate ventures that New Valley invests in. Douglas Elliman earned gross commissions of approximately $7,698 and $11,223 from these projects for the six months ended June 30, 2020 and 2019, respectively.

Combined Financial Statements for Unconsolidated Subsidiaries:
The following summarized financial data for certain unconsolidated subsidiaries that meet certain thresholds pursuant to SEC Regulation S-X Rule 210.10-01(b) includes information for the West Hollywood Edition investment. New Valley has elected a one-month lag reporting period for the investment.

Condominium and Mixed Use Development:
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
2020
 
2019
 
2020
 
2019
Income Statement
 
 
 
 
 
 
 
Revenue
$
1,830

 
$
—

 
$
33,409

 
$
—

Cost of goods sold
—

 
—

 
22,100

 
—

Other expenses
14,013

 
6

 
31,926

 
75

Loss from continuing operations
$
(12,183
)
 
$
(6
)
 
$
(20,617
)
 
$
(75
)

Investments in Real Estate, net:

The components of “Investments in real estate, net” were as follows:
 
June 30,
2020
 
December 31,
2019
Escena, net
$
9,852

 
$
9,972

Sagaponack
19,024

 
18,345

            Investments in real estate, net
$
28,876

 
$
28,317


Escena.  The assets of “Escena, net” were as follows:
 
June 30,
2020
 
December 31,
2019
Land and land improvements
$
8,911

 
$
8,910

Building and building improvements
1,926

 
1,926

Other
1,673

 
1,659

 
12,510

 
12,495

Less accumulated depreciation
(2,658
)
 
(2,523
)
 
$
9,852

 
$
9,972


New Valley recorded operating losses of $629 and $354 for the three months ended June 30, 2020 and 2019, respectively, from Escena. New Valley recorded operating losses of $272 and operating income of $332 for the six months ended June 30, 2020 and 2019, respectively, from Escena. Escena is a master planned community, golf course, and club house in Palm Springs, California.

Investment in Sagaponack. In April 2015, New Valley 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 June 30, 2020 and December 31, 2019, the assets of Sagaponack consisted of land and land improvements of $19,024 and $18,345, respectively.