Dear Investors, Customers, Employees and Friends:

Welcome to the Vector Group Ltd. website. Through our subsidiaries, Liggett Group Inc. and Vector Tobacco Inc., we manufacture and market high quality cigarette products to adult smokers in the United States. Vector Group also owns New Valley LLC.

Vector Group’s tobacco subsidiaries have a proud history of charting an independent course in the tobacco industry, dating from Liggett’s founding in 1873. In 1996, Liggett became the first tobacco company to settle certain smoking-related litigation. A year later, we led Liggett into its landmark announcement that smoking is addictive and causes cancer and other health ailments. To this day, Liggett – the fifth largest cigarette manufacturer in the U.S. – remains the only major tobacco company to carry “Smoking Is Addictive” warning labels on its cigarette packs and to list ingredients on its cartons. Liggett has a strong collection of discount cigarette brands, which includes Liggett Select, one of the fastest growing brands in the deep discount category. Liggett also offers Pyramid, Jade and Eve branded discount products.

Our Vector Tobacco subsidiary is focused on developing and bringing to market smoking products with science-based reductions in certain harmful compounds. Vector Tobacco introduced its revolutionary low nicotine and nicotine-free Quest cigarette brand in January 2003. Quest, designed for adult smokers who are interested in reducing the amount of nicotine in their cigarettes, comes in three levels of nicotine, to give adult smokers the opportunity to gradually step to nicotine-free smoking.

Vector Group is also involved in the real estate business through its New Valley subsidiary. New Valley owns a 50% ownership interest in Douglas Elliman Realty LLC, which operates the largest residential real estate brokerage company in the New York metropolitan area.

We continue to strive to deliver high quality products to our customers and increased value to our shareholders. We thank our shareholders, employees, customers and clients for their continued support.

Sincerely,

Bennett S. LeBow
Executive Chairman