2014 Notice to Vector Group Ltd. Stockholders

Vector Group Ltd. anticipates 14.97% of its 2014 cash distributions were dividends and the remaining 85.03% of 2014 cash distributions were nontaxable returns of capital 

Vector Group Ltd. (NYSE: VGR) anticipates 14.97% of its distributions paid in 2014 on its common stock were taxable dividends and the remaining 85.03% were nontaxable returns of capital.

These distributions consisted of four quarterly cash distributions paid in 2014.  Based on tax calculations, Vector Group has determined that its current earnings and profits for federal income tax purposes were 14.97% of the total quarterly cash distributions.  Vector Group’s determination of its earnings and profits for 2014 and prior years has been filed with the Internal Revenue Service (“IRS”).  Stockholders will be advised if there is any material change to the status of the 2014 distributions as a result of IRS review or audits.

Distributions that are not taxable as dividend income must be applied to reduce the adjusted tax basis of the shares on which the distributions are paid.  If the nontaxable distributions exceed the stockholder’s basis in the Vector Group stock, a capital gain will result.

Stockholders should secure their own tax advice regarding the status of cash and property distributions under applicable federal, state and local tax laws.