SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
December 4, 1995
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Date of Report (Date of earliest event reported)
AMERICAN REAL ESTATE PARTNERS, L.P.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-9516 13-3398766
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(State of Organization) (Commission File Number) (IRS Employer Identification Number)
100 SOUTH BEDFORD ROAD
MT. KISCO, NY 10549
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(Address of Registrant's Principal Executive Office) (Zip Code)
(914) 242-7700
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(Registrant's telephone number, including area code)
90 South Bedford Road, Mt. Kisco, NY 10549
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On December 4, 1995, the Registrant announced that no distributions
would be made for the fourth quarter of 1995 and that no distributions are
expected to be made through the end of 1996. Reference is made to the press
release, dated December 4, 1995, annexed hereto as Exhibit 20, for information
regarding the announcement.
ITEM 7. EXHIBITS.
Exhibit No. Description of Document
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20 Press Release, dated December 4, 1995.
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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.
AMERICAN REAL ESTATE PARTNERS, L.P.
(Registrant)
By: American Property Investors, Inc.
General Partner
By: /s/John P. Saldarelli
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John P. Saldarelli
Secretary and Treasurer
Date: December 4, 1995
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EXHIBIT INDEX
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Exhibit Number Description Page No.
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20 Press Release, dated December 4, 1995. 5
4
[LETTERHEAD OF AMERICAN REAL ESTATE PARTNERS, L.P.]
Contact: John P. Saldarelli
Secretary and Treasurer
914-242-7700
FOR IMMEDIATE RELEASE
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AMERICAN REAL ESTATE PARTNERS, L.P. ANNOUNCES THAT NO DISTRIBUTIONS FOR THE
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FOURTH QUARTER OF 1995 WILL BE MADE AND THAT NO DISTRIBUTIONS ARE EXPECTED TO
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BE MADE IN 1996.
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MT. KISCO, NEW YORK -- December 4, 1995 -- American Real Estate Partners, L.P.
(NYSE:ACP) ("AREP") today announced that no distribution for the fourth quarter
of 1995 will be made and that no distributions are expected to be made in 1996.
In making its announcement, AREP noted it plans to continue to apply available
Partnership operating cash flow toward its operations, repayment of maturing
indebtedness, tenant requirements and other capital expenditures and creation
of cash reserves for Partnership contingencies including environmental matters
and scheduled lease expirations. As previously reported, by the end of the
year 2000, net leases representing approximately 26% of AREP's net annual
rentals from its portfolio will be due for renewal, and by the end of the year
2002, 40% of such rentals will be due for renewal. Another factor that the
Board of Directors of AREP's general partner took into consideration was that
a number of AREP's properties are leased to large retail chains, some of which
are currently experiencing cash flow difficulties.
AREP's net operating cash flow in 1994 and to date in 1995 was approximately
break-even, after payment of periodic principal payments and maturing debt
obligations, capital expenditures and the creation of cash reserves for its
obligations. AREP expects this condition to continue in the near term as it
pays down debt and makes additional capital expenditures. No distributions were
made to unitholders for 1994 or 1995 to date.
AREP noted that it is seeking to enhance long-term unitholder value through
investment. AREP is focusing its investment outlook on opportunities to
acquire undervalued assets, such as land, development properties and non-
performing loans and securities of companies with significant real estate
assets. AREP intends not only to use its available cash to make these types
of investments, but also to sell some of its existing portfolio properties and
use these proceeds to reinvest in such undervalued assets. These types of
investments may involve debt restructuring, capital improvements and active
asset management, and by their nature as under-performing assets may not be
readily financeable and may not generate immediate positive cash flow. As such,
they require AREP to maintain a strong capital base both to react quickly to
these market opportunities as well as to allow AREP to rework the assets to
enhance their turnaround performance.
Although the income generated from such activities may result in tax
liabilities to unitholders, AREP believes that conservation of cash from
operations and sales and refinancing proceeds, in order to meet obligations
from property expenses, lease expirations, capital expenditures, maturing
debt obligations and environmental matters, and for reinvestment in additional
undervalued and distressed acquisitions of the types discussed, will enhance
Partnership value over the long-term and is in the best interests of the
Partnership and its partners. To the extent the fulfillment of obligations
mentioned and new acquisitions enhance the Partnership's investment portfolio,
AREP may be able to reinstate distributions to Unitholders at some future date.
AREP stated that it expects to reconsider distribution issues for 1997.
The Board stated it believes that in the long term AREP's unitholders will
greatly benefit from the policy it is following.
American Real Estate Partners, L.P. is a master limited partnership primarily
engaged in acquiring and managing real estate, with the primary focus on office,
retail, industrial, hotel and residential properties.
