UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of Earliest Event Reported): November 9, 2006
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American
Real Estate Partners, L.P.
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(Exact
name of registrant as specified in its charter)
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Delaware
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1-9516
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13-3398766
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(State
or other jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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767
Fifth Avenue, Suite 4700, New York, NY
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10153
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (212)
702-4300
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N/A
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(Former
name or former address, if changed since last
report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written
communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Section
8 - Other Events
Item
8.01 Other Events
The
following information is furnished pursuant to Item 8.01, “Other Events”
On
November 9, 2006, American Real Estate Partners, L.P. (“AREP”) issued a press
release setting forth AREP’s third quarter 2006 financial results. A copy of
AREP’s press release is attached as Exhibit 99.1.
Exhibit
Index
99.1 Press
Release dated November 9, 2006
[remainder
of page intentionally left blank; signature page follows]
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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AMERICAN
REAL ESTATE PARTNERS, L.P.
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(Registrant)
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By: American
Property Investors, Inc.,
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its
General Partner
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By:
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/s/
Hillel Moerman
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Hillel
Moerman,
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Chief
Financial Officer
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American
Property Investors, Inc.,
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the
General Partner of
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American
Real Estate Partners, L.P.
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Date: November
9, 2006
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3
EXHIBIT
99.1
Investor
Contact:
Andrew
Skobe
Treasurer
212-702-4300
For
Release: November 9, 2006
American
Real Estate Partners, L.P. Reports Third-Quarter Financial
Results
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Revenues
of $373.3 million, an increase of $83.9
million
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Earnings
of $103.1 million, compared to losses of $126.1
million
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Investment
gains of $22.2 million, compared to investment losses of $23.8
million
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Board
of Directors approved $0.10 per depositary unit quarterly
distribution
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Entered
into agreement to sell The Sands Hotel and
Casino
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Entered
into Letter of Intent to sell our Oil and Gas
operations
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New
York, NY -
American Real Estate Partners, L.P. (“AREP”) (NYSE:ACP) today reported its third
quarter 2006 earnings of $103.1 million, or $1.63 per LP unit, compared to
third
quarter 2005 losses of $126.1 million, or $1.99 per LP unit.
Three
Months Ended September 30, 2006
For
the
third quarter of 2006, revenues increased to $373.3 million from $289.4 million
during the third quarter of 2005. The increase in revenues was primarily due
to
the inclusion of revenue from AREP’s Home Fashion segment, which was acquired in
August 2005, for the full period. AREP reported an operating loss of $13.4
million for the third quarter of 2006 compared to operating income of $11.0
million for the third quarter of 2005. This loss is primarily attributable
to
the inclusion of operating losses from AREP’s Home Fashion segment for the full
period.
Nine
Months Ended September 30, 2006
For
the
first nine months of 2006, revenues increased to $1.1 billion from $496.6
million during the first nine months of 2005. The increase in revenues was
primarily due to the inclusion of revenue from AREP’s Home Fashion segment,
which was acquired in August 2005, for the full period. AREP reported an
operating loss of $62.9 million for the first nine months of 2006 compared
to
operating income of $46.2 million for the first nine months of 2005. This loss
is primarily attributable to the inclusion of operating losses from AREP’s Home
Fashion segment for the full period.
EHX-1
The
following table presents results for the third quarter of 2006 and 2005 by
segment and for discontinued operations (in millions):
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Operating
Income (Loss)
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Depreciation,
Depletion & Amortization
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For
three months:
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2006
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2005
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2006
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2005
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Gaming
(1)
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$
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9.4
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$
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14.3
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$
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7.4
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$
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5.8
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Real
Estate
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5.7
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4.5
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1.5
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1.6
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Home
Fashion (2)
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(24.3
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(5.1
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6.3
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6.9
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Holding
Company
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(4.1
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(2.7
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1.4
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0.5
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Total
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$
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(13.3
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$
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11.0
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$
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16.6
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$
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14.8
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Discontinued
Ops
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$
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79.7
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$
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(41.9
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$
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29.5
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$
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25.9
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Includes
Aquarius in the third quarter of
2006.
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Home
fashion results included from August 8, 2005.
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Gaming
AREP’s
wholly-owned subsidiary, American Casino & Entertainment Properties LLC,
owns three Las Vegas casinos: Stratosphere Casino Hotel and Tower, Arizona
Charlie’s Decatur and Arizona Charlie’s Boulder, and one casino in Laughlin,
Nevada: the Aquarius Casino Resort, which was acquired on May 19, 2006.
For
the
third quarter of 2006, AREP’s Gaming
segment,
excluding the Aquarius, had net revenues of $78.6 million, a decrease of 3.8%
from the third quarter of 2005, operating income of $10.6 million, a decrease
of
25.7% from the third quarter of 2005, and depreciation and amortization of
$6.0
million.
For
the
first nine months of 2006, AREP’s Gaming segment, excluding the Aquarius, had
net revenues of $246.4 million, an increase of 0.1% from the first nine months
of 2005, operating income of $44.9 million, a decrease of 13.8% from the first
nine months of 2005, and depreciation and amortization of $17.6 million.
Real
Estate
AREP’s
Real Estate segment is comprised of three groups: rental real estate; property
development and resort operations. For the third quarter of 2006, real estate
activities had revenues of $33.1 million, an increase of 37.6% from the third
quarter of 2005, operating income of $5.7 million, an increase of 26.5% from
the
third quarter of 2005, and depreciation and amortization of $1.5
million.
For
the
first nine months of 2006, real estate activities had revenues of $103.0
million, an increase of 53.9% from the first nine months of 2005, operating
income of $24.1 million, an increase of 137.1% from the first nine months of
2005, and depreciation and amortization of $4.2 million.
EHX-2
Home
Fashion
On
August
8, 2005, WestPoint International, Inc., an indirect subsidiary of AREP,
completed the acquisition of substantially all the assets of WestPoint Stevens
Inc. WPI is engaged in the business of manufacturing, sourcing, marketing and
distributing bed and bath home fashion products.
For
the
third quarter of 2006, AREP’s Home Fashion segment had revenues of $240.5
million, an operating loss of $24.3 million and depreciation of $6.3 million.
Included in the operating loss are $3.3 million of restructuring charges.
For
the
first nine months of 2006, AREP’s Home Fashion segment had revenues of $721.1
million, an operating loss of $110.6 million and depreciation of $26.2 million.
Included in the operating loss are $33.7 million of restructuring and impairment
charges.
Discontinued
Operations
On
September 3, 2006, our indirect majority owned subsidiary, Atlantic Coast
Entertainment Holdings, Inc., or Atlantic Coast, our 99% subsidiary, American
Real Estate Holdings Limited Partnership, or AREH, and certain entities owned
by
or affiliated with AREH, entered into an agreement with Pinnacle Entertainment,
Inc., or Pinnacle, pursuant to which Pinnacle agreed to acquire all of the
outstanding membership interests in ACE Gaming LLC, or ACE, which owns The
Sands
Hotel and Casino in Atlantic City, New Jersey and 100% of the equity interests
in certain subsidiaries of AREH which own parcels of real estate adjacent to
The
Sands, including approximately 7.7 acres known as the Traymore site. We own,
through subsidiaries, approximately 67.6% of Atlantic Coast, which owns 100%
of
ACE. For the third quarter of 2006, our Atlantic City Gaming activities had
revenues of $41.6 million, a decrease of 6.5% from the third quarter of 2005,
and an operating loss of $10.4 million. For the first nine months of 2006,
our
Atlantic City Gaming activities had revenues of $124.0 million, a decrease
of
1.1% from the first nine months of 2005, and an operating loss of $9.3
million.
On
September 7, 2006, we and AREH entered into an Exclusivity Agreement and Letter
of Intent with Riata Energy, Inc., or Riata, pursuant to which Riata would
acquire all of the issued and outstanding membership interests of our indirect
wholly owned subsidiary, NEG Oil & Gas LLC, through which we own all of our
Oil and Gas operations. For the third quarter of 2006, our Oil and Gas
activities had revenues of $135.6 million, compared to a loss of $2.3 million
for the third quarter of 2005, and operating income of $89.3 million compared
to
an operating loss of $39.7 million for the third quarter of 2005. For the first
nine months of 2006, our Oil and Gas activities had revenues of $330.5 million,
an increase of 281.1% from the first nine months of 2005, and operating income
of $200.9 million compared to an operating loss of $28.7 million for the first
nine months of 2005.
EHX-3
Holding
Company Activity
Total
general and administrative expenses (including acquisition costs) incurred
by
the holding company were $4.1 million for the third quarter of 2006 compared
to
$2.7 million for the third quarter of 2005 and $19.1 million for the first
nine
months of 2006 compared to $10.9 million for the first nine months of 2005.
Conference
Call Information
AREP
will
discuss third quarter results on a conference call and Webcast on Thursday,
November 9, 2006 at 10:00 a.m. EST. The Webcast can be viewed live on AREP’s
website at www.arep.com.
It will
also be archived and made available at www.arep.com
under
the Investor Relations Section. The dial-in number for the conference call
is
(888) 935-4577. The access code is 8142995.
*
* *
American
Real Estate Limited Partners, L.P. (NYSE: ACP), a master limited partnership,
is
a diversified holding company engaged in three primary business segments:
Gaming, Real Estate and Home Fashion. For more information, please visit the
company’s website at www.arep.com.
EHX-4
Caution
Concerning Forward-Looking Statements
This
release contains certain “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, many of which are beyond
our
ability to control or predict. Forward-looking statements may be identified
by
words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” “will,” or words of similar meaning and include, but are not
limited to, statements about the expected future business and financial
performance of AREP and its subsidiaries. Among these risks and uncertainties
are risks related to our gaming and associated hotel, restaurant and
entertainment operations, including the effects of regulation, substantial
competition, rising operating costs and economic downturns; risks related to
our
real estate activities, including the extent of any tenant bankruptcies and
insolvencies, our ability to maintain tenant occupancy at current levels, our
ability to obtain, at reasonable costs, adequate insurance coverage and
competition for investment properties; risks
related to our home fashion operations, including changes in the availability
and price of raw materials, changes in customer preferences and changes in
transportation costs and delivery times and other risks and uncertainties
detailed from time to time in our filings with the SEC. We undertake no
obligation to publicly update or review any forward-looking information, whether
as a result of new information, future developments or otherwise.
EHX-5
APPENDIX
I
CONSOLIDATED
STATEMENTS OF OPERATIONS
In
millions of dollars except per unit data
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Three
Months Ended
September
30,
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2006
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2005
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(Restated)
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Revenues
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$
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373.3
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$
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289.4
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Operating
income (loss)
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$
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(13.4
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$
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11.0
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Interest
expense
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(27.8
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(24.7
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Interest
income
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11.5
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10.6
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Other
income (expense), net
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22.4
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(22.8
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Pre-tax
income (loss)
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(7.3
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(25.9
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Income
tax expense
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(1.5
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(3.5
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Minority
interests
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8.9
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2.4
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Income
(loss) from continuing operations
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0.1
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(27.0
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Income
(loss) from discontinued operations
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103.0
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(99.1
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Net
earnings (loss)
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$
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103.1
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$
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(126.1
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)
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Net
earnings (loss) attributable to:
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Limited
partners
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$
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101.0
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$
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(122.9
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)
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General
partner
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2.1
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(3.2
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||||
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Income
tax expense
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103.1
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(126.1
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Net
earnings (loss) per LP unit:
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|||||||
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Basic
earnings (loss):
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Income
(loss) from continuing operations
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$
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-
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$
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(0.42
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)
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Income
(loss) from discontinued operations
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1.63
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(1.57
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)
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Basic
earnings (loss) per LP unit
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$
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1.63
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$
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(1.99
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Weighted
average units
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Outstanding
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61,857
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61,857
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Diluted
earnings (loss):
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Income
(loss) from continuing operations
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$
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-
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$
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(0.42
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Income
(loss) from discontinued operations
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1.63
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(1.57
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)
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Diluted
earnings (loss) per L.P. unit
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$
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1.63
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$
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(1.99
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)
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Weighted
average units and
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|||||||
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equivalent
units outstanding
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61,857
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61,857
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APP-I-1
APPENDIX
II
CONSOLIDATED
STATEMENTS OF OPERATIONS
In
millions of dollars except per unit data
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Nine
Months Ended
September
30,
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2006
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2005
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(Restated)
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Revenues
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$
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1,102.9
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$
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496.6
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Operating
income (loss)
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$
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(62.9
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$
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46.2
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Interest
expense
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(79.2
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(70.4
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Interest
income
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35.8
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35.4
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Other
income (expense), net
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88.6
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(16.3
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)
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Pre-tax
income (loss)
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(17.7
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)
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(5.1
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)
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Income
tax expense
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(10.1
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(13.4
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Minority
interests
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49.6
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2.4
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Income
(loss) from continuing operations
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21.8
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(16.1
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Income
(loss) from discontinued operations
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202.1
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(73.1
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Net
earnings (loss)
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$
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223.9
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$
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(89.2
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)
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Net
earnings (loss) attributable to:
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Limited
partners
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$
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219.5
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$
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(82.6
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)
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General
partner
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4.4
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(6.6
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Income
tax expense
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223.9
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(89.2
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Net
earnings (loss) per LP unit:
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Basic
earnings (loss):
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Income
(loss) from continuing operations
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$
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0.35
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$
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(0.40
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)
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Income
(loss) from discontinued operations
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3.20
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(1.21
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)
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Basic
earnings (loss) per LP unit
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$
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3.55
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$
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(1.61
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)
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Weighted
average units
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|||||||
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Outstanding
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61,857
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51,351
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Diluted
earnings (loss):
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|||||||
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Income
(loss) from continuing operations
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$
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0.35
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$
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(0.40
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)
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Income
(loss) from discontinued operations
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3.20
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(1.21
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)
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Diluted
earnings (loss) per L.P. unit
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$
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3.55
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$
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(1.61
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)
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Weighted
average units and
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|||||||
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equivalent
units outstanding
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61,867
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51,351
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APP-II-1
APPENDIX
III
CONSOLIDATED
SUMMARY BALANCE SHEET
The
following table presents AREP’s consolidated summary balance sheet data as of
September 30, 2006 and December 31, 2005 ($ in millions):
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September
30,
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December
31,
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||||||
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2006
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2005
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||||||
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(Restated)
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|||||||
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Assets
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|||||||
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Cash
and cash equivalents
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$
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280.7
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$
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460.1
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|||
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Investments
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1,037.2
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820.7
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|||||
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Assets
of disc. ops. available for sale
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1,305.0
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1,177.4
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|||||
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Other
current assets
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569.7
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657.0
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|||||
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Total
current assets
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3,192.6
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3,115.2
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|||||
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Non-current
investments
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15.4
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3.0
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|||||
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Property,
plant and equipment
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804.7
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747.2
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|||||
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Other
assets
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64.1
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77.7
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|||||
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Intangible
assets
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26.5
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23.4
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|||||
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Total
assets
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$
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4,103.3
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$
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3,966.5
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|||
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Liabilities
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|||||||
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Current
liabilities
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$
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393.1
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$
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426.1
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|||
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Liabilities
of disc. ops. available for sale
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420.9
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489.6
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|||||
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Long-term
debt
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1,185.9
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1,111.7
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|||||
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Other
long term-term liabilities
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21.6
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24.0
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|||||
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Preferred
limited partnership units
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116.2
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112.1
|
|||||
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Total
liabilities
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2,137.7
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2,163.5
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|||||
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Minority
interests
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266.3
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304.6
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|||||
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Partners’
equity
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1,699.3
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1,498.4
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|||||
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Total
liabilities and partners’ equity
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$
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4,103.3
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$
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3,966.5
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|||
APP-III-1