VECTOR GROUP LTD [VGR] Filings

10-Q 1 vgr-20220331.htm 10-Q vgr-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

VECTOR GROUP LTD.

(Exact name of registrant as specified in its charter)


Delaware	1-5759	65-0949535
(State or other jurisdiction of incorporation	Commission File Number	(I.R.S. Employer Identification No.)
incorporation or organization)

4400 Biscayne Boulevard

Miami, Florida 33137

305-579-8000

(Address, including zip code and telephone number, including area code,

of the principal executive offices)

Securities Registered Pursuant to 12(b) of the Act:


Title of each class:	Trading	Name of each exchange
	Symbol(s)	on which registered:
Common stock, par value $0.10 per share	VGR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☒

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes x No

At May 6, 2022, Vector Group Ltd. had 154,938,177 shares of common stock outstanding.

VECTOR GROUP LTD.

FORM 10-Q

TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION

Item 1. Vector Group Ltd. Condensed Consolidated Financial Statements (Unaudited):

Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021			2

Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021			3

Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021			4

Condensed Consolidated Statements of Stockholders' Deficiency for the three months ended March 31, 2022 and 2021			5

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021			6

Notes to Condensed Consolidated Financial Statements			7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			35

Item 3. Quantitative and Qualitative Disclosures About Market Risk			49

Item 4. Controls and Procedures			49

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			50

Item 1A. Risk Factors			50

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			51

Item 6. Exhibits			52

SIGNATURE			53

VECTOR GROUP LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Per Share Amounts)

Unaudited


	March 31, 2022		December 31, 2021
ASSETS:
Current assets:
Cash and cash equivalents	$	238,305	$	193,411
Investment securities at fair value	133,338		146,687

Accounts receivable - trade, net	29,885		16,067
Inventories	97,991		94,615
Income taxes receivable, net	—		10,948

Other current assets	8,103		10,075
Total current assets	507,622		471,803
Property, plant and equipment, net	36,079		36,883
Investments in real estate, net	9,039		9,098
Long-term investments (includes $31,057 and $32,089 at fair value)	49,799		53,073
Investments in real estate ventures	111,503		105,062

Operating lease right-of-use assets	10,133		10,972
Intangible assets	107,511		107,511
Other assets	80,884		76,685
Total assets	$	912,570	$	871,087
LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
Current liabilities:
Current portion of notes payable and long-term debt	$	76	$	79

Current payments due under the Master Settlement Agreement	68,591		11,886


Income taxes payable, net	3,462		—

Current operating lease liability	3,860		3,838

Other current liabilities	139,961		149,487
Total current liabilities	215,950		165,290
Notes payable, long-term debt and other obligations, less current portion	1,399,631		1,398,591

Non-current employee benefits	69,164		68,970
Deferred income taxes, net	31,307		34,768
Non-current operating lease liability	7,885		8,853
Payments due under the Master Settlement Agreement	11,116		13,224

Other liabilities	18,169		22,944
Total liabilities	1,753,222		1,712,640
Commitments and contingencies (Note 9)
Stockholders' deficiency:
Preferred stock, par value $1 per share, 10,000,000 shares authorized	—		—
Common stock, par value $0.1 per share, 250,000,000 shares authorized, 154,938,177 and 153,959,427 shares issued and outstanding	15,494		15,396
Additional paid-in capital	12,183		11,172
Accumulated deficit	(852,863)		(852,398)
Accumulated other comprehensive loss	(15,466)		(15,723)

Total Vector Group Ltd. stockholders' deficiency	(840,652)		(841,553)


Total liabilities and stockholders' deficiency	$	912,570	$	871,087

The accompanying notes are an integral part of the condensed consolidated financial statements.

VECTOR GROUP LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Amounts)

Unaudited


	Three Months Ended
	March 31,
		2022		2021
Revenues:
Tobacco*		$	309,048	$	268,463
Real estate		2,994		2,525

Total revenues		312,042		270,988

Expenses:
Cost of sales:
Tobacco*		211,537		164,031
Real estate		1,278		876

Total cost of sales		212,815		164,907

Operating, selling, administrative and general expenses		24,029		30,101
Litigation settlement and judgment expense		72		5



Operating income		75,126		75,975

Other income (expenses):
Interest expense		(25,098)		(28,721)
Loss on extinguishment of debt		—		(21,362)

Equity in (losses) earnings from investments		(2,242)		577
Equity in (losses) earnings from real estate ventures		(1,877)		1,589
Other, net		(1,145)		2,706
Income before provision for income taxes		44,764		30,764
Income tax expense		12,222		9,214
Income from continuing operations		32,542		21,550
Income from discontinued operations, net of income taxes		—		10,407
Net income		$	32,542	$	31,957









Per basic common share:

Net income from continuing operations applicable to common shares		$	0.21	$	0.14
Net income from discontinued operations applicable to common shares		—		0.06
Net income applicable to common shares		$	0.21	$	0.20

Per diluted common share:

Net income from continuing operations applicable to common shares		$	0.21	$	0.14
Net income from discontinued operations applicable to common shares		—		0.06
Net income applicable to common shares		$	0.21	$	0.20

* Revenues and cost of sales include federal excise taxes of $116,079, and $97,714 for the three months ended March 31, 2022 and 2021, respectively.

The accompanying notes are an integral part of the condensed consolidated financial statements.

VECTOR GROUP LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

Unaudited


	Three Months Ended
	March 31,
		2022		2021

Net income		$	32,542	$	31,957

Net unrealized losses on investment securities available for sale:
Change in net unrealized losses		(1,222)		(182)
Net unrealized losses (gains) reclassified into net income		1,165		(41)
Net unrealized losses on investment securities available for sale		(57)		(223)



Net change in pension-related amounts:


Amortization of loss		404		482


Other comprehensive income		347		259

Income tax effect on:
Change in net unrealized losses on investment securities		316		49
Net unrealized losses (gains) reclassified into net income on investment securities		(301)		11



Pension-related amounts		(105)		(130)
Income tax provision on other comprehensive income		(90)		(70)

Other comprehensive income, net of tax		257		189

Comprehensive income		$	32,799	$	32,146

The accompanying notes are an integral part of the condensed consolidated financial statements.

VECTOR GROUP LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY

(Dollars in Thousands, Except Share Amounts)

Unaudited


	Vector Group Ltd. Stockholders' Deficiency
				Additional Paid-In				Accumulated Other Comprehensive
	Common Stock					Accumulated
	Shares	Amount		Capital		Deficit		Loss		Total
Balance as of January 1, 2022	153,959,427	$	15,396	$	11,172	$	(852,398)	$	(15,723)	$	(841,553)

Net income	—	—		—		32,542		—		32,542






Total other comprehensive income	—	—		—		—		257		257

Dividends on common stock ($0.20 per share)	—	—		—		(31,767)		—		(31,767)
Restricted stock grants	1,070,000	107		(107)		—		—		—

Surrender of shares in connection with restricted stock vesting	(91,250)	(9)		(1,029)		—		—		(1,038)












Stock-based compensation	—	—		2,147		—		—		2,147






Other	—	—		—		(1,240)		—		(1,240)

Balance as of March 31, 2022	154,938,177	$	15,494	$	12,183	$	(852,863)	$	(15,466)	$	(840,652)


	Vector Group Ltd. Stockholders' Deficiency
				Additional Paid-In				Accumulated Other Comprehensive
	Common Stock					Accumulated
	Shares	Amount		Capital		Deficit		Loss		Total
Balance as of January 1, 2021	153,324,629	$	15,332	$	—	$	(653,945)	$	(21,074)	$	(659,687)

Net income	—	—		—		31,957		—		31,957






Total other comprehensive income	—	—		—		—		189		189

Dividends on common stock ($0.20 per share)	—	—		—		(31,618)		—		(31,618)
Restricted stock grant	870,000	87		(87)		—		—		—















Stock-based compensation	—	—		2,660		—		—		2,660





Balance as of March 31, 2021	154,194,629	$	15,419	$	2,573	$	(653,606)	$	(20,885)	$	(656,499)

The accompanying notes are an integral part of the condensed consolidated financial statements.

VECTOR GROUP LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

Unaudited


	Three Months Ended
	March 31,
	2022		2021
Net cash provided by operating activities	$	74,796	$	78,364
Cash flows from investing activities:
Sale of investment securities	16,933		10,228
Maturities of investment securities	21,105		13,968
Purchase of investment securities	(27,231)		(38,441)
Proceeds from sale or liquidation of long-term investments	—		4,389



Purchase of long-term investments	(1,000)		(5,813)
Investments in real estate ventures	(8,488)		(8,087)
Distributions from investments in real estate ventures	3,310		7,577
Increase in cash surrender value of life insurance policies	(765)		(564)
Increase in restricted assets	—		(3)


Capital expenditures	(1,222)		(1,931)



Paydowns of investment securities	63		172


Net cash provided by (used in) investing activities	2,705		(18,505)
Cash flows from financing activities:
Proceeds from issuance of debt	—		875,000
Deferred financing costs	—		(20,000)
Repayments of debt	(11)		(853,158)
Borrowings under revolving credit facility	67,298		259
Repayments on revolving credit facility	(67,298)		(259)
Dividends on common stock	(31,658)		(32,273)





Other	(938)		(21)
Net cash used in financing activities	(32,607)		(30,452)
Net increase in cash, cash equivalents and restricted cash	44,894		29,407
Cash, cash equivalents and restricted cash, beginning of period	194,849		365,677
Cash, cash equivalents and restricted cash, end of period	$	239,743	$	395,084

The accompanying notes are an integral part of the condensed consolidated financial statements.

VECTOR GROUP LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands, Except Per Share Amounts)

Unaudited

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)Basis of Presentation:

The condensed consolidated financial statements of Vector Group Ltd. (the “Company” or “Vector”) include the accounts of Liggett Group LLC (“Liggett”), Vector Tobacco LLC (“Vector Tobacco”), Liggett Vector Brands LLC (“Liggett Vector Brands”), New Valley LLC (“New Valley”) and other less significant subsidiaries. New Valley includes the accounts of other less significant subsidiaries. All significant intercompany balances and transactions have been eliminated.

Liggett and Vector Tobacco are engaged in the manufacture and sale of cigarettes in the United States. Liggett Vector Brands coordinates Liggett and Vector Tobacco’s sales and marketing efforts. Certain references to “Liggett” refer to the Company’s tobacco operations, including the business of Liggett and Vector Tobacco, unless otherwise specified. New Valley is engaged in the real estate business.

The unaudited, interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and, in management’s opinion, contain all adjustments, consisting only of normal recurring items, necessary for a fair statement of the results for the periods presented. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”). The consolidated results of operations for interim periods should not be regarded as necessarily indicative of the results that may be expected for the entire year.

(b)Distributions and Dividends on Common Stock:

The Company records distributions on its common stock as dividends in its condensed consolidated statements of stockholders’ deficiency to the extent of retained earnings. Any amounts exceeding retained earnings are recorded as a reduction to additional paid-in capital to the extent paid-in-capital is available and then to accumulated deficit.

(c)Earnings Per Share (“EPS”):

Net income for purposes of determining basic and diluted EPS for discontinued operations and net income available to common stockholders was as follows:


	Three Months Ended
	March 31,
		2022		2021
Net income from continuing operations		$	32,542	$	21,550
Net income from discontinued operations		—		10,407
Net income		32,542		31,957
Income from continuing operations attributable to participating securities		(983)		(776)
Net income applicable to common shares		$	31,559	$	31,181

Net income for purposes of determining basic and diluted EPS for continuing operations applicable to common shares was as follows:


	Three Months Ended
	March 31,
		2022		2021
Net income from continuing operations		$	32,542	$	21,550
Income from continuing operations attributable to participating securities		(983)		(754)
Net income available to common stockholders		$	31,559	$	20,796

VECTOR GROUP LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in Thousands, Except Per Share Amounts)

Unaudited

Basic and diluted EPS for continuing and discontinued operations were calculated using the following common shares:


	Three Months Ended
	March 31,
		2022	2021
Weighted-average shares for basic EPS		152,586,900	152,249,440

Plus incremental shares related to stock options and non-vested restricted stock		158,353	134,650
Weighted-average shares for diluted EPS		152,745,253	152,384,090

It may not be possible to recalculate EPS attributable to common stockholders by adjusting EPS from continuing operations by EPS from discontinued operations as each amount is calculated independently.

The following non-vested restricted stock was outstanding during the three months ended March 31, 2022 and 2021, but was not included in the computation of diluted EPS because the impact of the per share expense associated with the restricted stock was greater than the average market price of the common shares during the respective periods.


	Three Months Ended
	March 31,
		2022		2021


Weighted-average shares of non-vested restricted stock		—		97,222
Weighted-average expense per share		$	—	$	14.31

(d)Other, net:

Other, net consisted of:


	Three Months Ended
	March 31,
		2022		2021

Interest and dividend income		$	450	$	534






Net (losses) gains recognized on investment securities		(3,039)		2,415
Net periodic benefit cost other than the service costs		(236)		(244)


Other income		1,680		1
Other, net		$	(1,145)	$	2,706

(e)Other Assets:

Other assets consisted of:


	March 31, 2022		December 31, 2021
Restricted assets	$	1,551	$	1,551
Prepaid pension costs	44,866		44,585
Other assets	34,467		30,549
Total other assets	$	80,884	$	76,685

VECTOR GROUP LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in Thousands, Except Per Share Amounts)

Unaudited

(f)Other Current Liabilities:

Other current liabilities consisted of:


	March 31, 2022		December 31, 2021
Accounts payable	$	7,453	$	9,443
Accrued promotional expenses	57,610		55,647
Accrued excise and payroll taxes payable, net	21,375		22,919
Accrued interest	32,667		30,676
Accrued salaries and benefits	4,042		13,982
Allowance for sales returns	6,063		6,669
Other current liabilities	10,751		10,151
Total other current liabilities	$	139,961	$	149,487

(g)Reconciliation of Cash, Cash Equivalents and Restricted Cash:

The components of “Cash, cash equivalents and restricted cash” in the condensed consolidated statements of cash flows were as follows:


	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	238,305	$	193,411

Restricted cash and cash equivalents included in other assets	1,438		1,438
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows	$	239,743	$	194,849

(h)Related Party Transactions:

Agreements with Douglas Elliman. The Company received $1,050 under the Transition Services Agreement and $491 under the Aircraft Lease Agreement during the three months ended March 31, 2022.

Real estate venture investments. 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 real estate venture investments. Douglas Elliman had gross commissions of approximately $900 and $2,357 from these projects for the three months ended March 31, 2022 and 2021, respectively.

(i)New Accounting Pronouncements:

ASUs to be adopted in future periods:

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The ASU requires that an acquirer recognize and measure contract assets and contract liabilities in a business combination in accordance with Topic 606. The ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements.

VECTOR GROUP LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in Thousands, Except Per Share Amounts)

Unaudited

2. REVENUE RECOGNITION

Disaggregation of Revenue

The Company disaggregates revenues by segment.

Tobacco. Tobacco segment revenues are not disaggregated because all revenues are generated from the discount segment of the U.S. cigarette industry.

Real Estate. Real Estate segment revenues are disaggregated in the table below.


	Three Months Ended
	March 31,
	2022		2021
Real Estate Segment Revenues
Sales on facilities primarily from Escena	$	2,969	$	1,625
Revenues from investments in real estate	25		900
Total real estate revenues	$	2,994	$	2,525

3. LEASES

The Company has operating and finance leases for corporate and sales offices, and certain vehicles and equipment. The components of lease expense were as follows:


	Three Months Ended
	March 31,
		2022		2021
Operating lease cost		$	1,125	$	1,166
Short-term lease cost		103		91
Variable lease cost		56		52

Finance lease cost:
Amortization		14		16
Interest on lease liabilities		2		3
Total lease cost		$	1,300	$	1,328

VECTOR GROUP LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in Thousands, Except Per Share Amounts)

Unaudited

Supplemental cash flow information related to leases was as follows:


	Three Months Ended
	March 31,
	2022		2021
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	1,235	$	1,266
Operating cash flows from finance leases	2		3
Financing cash flows from finance leases	14		15

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	—		7
Finance leases	—		—

As of March 31, 2022, the Company had $120 in undiscounted lease payments relating to operating leases for equipment that have not yet commenced. The operating leases will commence in the second half of 2022 with lease terms ranging between 2 and 3 years.

4. DISCONTINUED OPERATIONS

On December 29, 2021, the Company completed the distribution to its stockholders (including Vector common stock underlying outstanding stock options awards and restricted stock awards) of the common stock of Douglas Elliman Inc. (the “Distribution”).

There were no assets or liabilities of discontinued operations of Douglas Elliman as of March 31, 2022 or December 31, 2021.

The financial results of Douglas Elliman through the completion of the Distribution are presented as income from discontinued operations, net of income taxes on the Company’s condensed consolidated statements of operations. The following table presents financial results of Douglas Elliman for the periods prior to the completion of the Distribution:


	Three Months Ended March 31,
	2022		2021
	(Dollars in thousands)
Revenues:
Real estate	$	—	$	272,776

Expenses:
Cost of sales	—		198,635

Operating, selling, administrative and general expenses	—		59,913



Operating income	—		14,228

Other income (expenses):
Interest expense	—		(30)

Other, net	—		48
Pretax income from discontinued operations	—		14,246
Income tax expense	—		3,839
Income from discontinued operations	$	—	$	10,407

VECTOR GROUP LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in Thousands, Except Per Share Amounts)

Unaudited

The following table presents the information regarding certain components of cash flows from discontinued operations:


	Three Months Ended March 31,
	2022		2021
	(Dollars in thousands)
Depreciation and amortization	$	—	$	2,123
Non-cash lease expense	—		4,487



Capital expenditures	—		(597)

5. INVENTORIES

Inventories consisted of:


	March 31, 2022		December 31, 2021
Leaf tobacco	$	40,483	$	38,825
Other raw materials	9,115		7,560
Work-in-process	692		2,639

Finished goods	66,328		64,218

Inventories at current cost	116,618		113,242
LIFO adjustments	(18,627)		(18,627)
	$	97,991	$	94,615

All of the Company’s inventories at March 31, 2022 and December 31, 2021 are reported under the LIFO method. The $18,627 LIFO adjustment as of March 31, 2022 reduced the current cost of inventories by $12,128 for Leaf tobacco, $829 for Other raw materials, $18 for Work-in-process and $5,652 for Finished goods. The $18,627 LIFO adjustment as of December 31, 2021 reduced the current cost of inventories by $12,128 for Leaf tobacco, $829 for Other raw materials, $18 for Work-in-process and $5,652 for Finished goods.

The amount of capitalized Master Settlement Agreement (“MSA”) cost in “Finished goods” inventory was $20,971 and $20,450 at March 31, 2022 and December 31, 2021, respectively. Federal excise tax capitalized in inventory was $26,021 and $25,160 at March 31, 2022 and December 31, 2021, respectively.

At March 31, 2022, Liggett had tobacco purchase commitments of approximately $8,293. Liggett has a single-source supply agreement for reduced ignition propensity cigarette paper through December 2022.

VECTOR GROUP LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Dollars in Thousands, Except Per Share Amounts)

Unaudited

6. INVESTMENT SECURITIES

Investment securities consisted of the following:


	March 31, 2022		December 31, 2021
Debt securities available for sale	$	91,838	$	103,906


Equity securities at fair value:
Marketable equity securities	18,962		19,560
Mutual funds invested in debt securities	22,538		23,221
Long-term investment securities at fair value (1)	31,057		32,089
Total equity securities at fair value	72,557		74,870

Total investment securities at fair value	164,395		178,776
Less:
Long-term investment securities at fair value (1)	31,057		32,089
Current investment securities at fair value	$	133,338	$	146,687

Long-term investment securities at fair value (1)	$	31,057	$	32,089
Equity-method investments	18,742		20,984
Total long-term investments	$	49,799	$	53,073

Equity securities at cost (2)	$	6,200	$	5,200

(1) These assets are measured at net asset value (“NAV”) as a practical expedient under ASC 820.

(2) These assets are without readily determinable fair values that do not qualify for the NAV practical expedient and are included in Other assets on the condensed consolidated balance sheets.

Net (losses) gains recognized on investment securities were as follows:


	Three Months Ended
	March 31,
		2022		2021
Net (losses) gains recognized on equity securities		$	(1,874)	$	2,374
Net gains recognized on debt securities available for sale		—		55

Impairment expense		(1,165)		(14)




Net (losses) gains recognized on investment securities		$	(3,039)	$	2,415

(a) Debt Securities Available for Sale:

The components of debt securities available for sale at March 31, 2022 were as follows:


	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value


Marketable debt securities	$	91,827	$	11	$	—	$	91,838