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
MARCH 26, 1997
--------------
Date of Report (Date of earliest event reported)
AMERICAN REAL ESTATE PARTNERS, L.P.
-----------------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-9516 13-3398766
-------- ------ ----------
(State of Organization) (Commission File Number) (IRS Employer Identification Number)
100 SOUTH BEDFORD ROAD
MT. KISCO, NY 10549
-------------------
(Address of Registrant's Principal Executive Office) (Zip Code)
(914) 242-7700
--------------
(Registrant's telephone number, including area code)
--------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On March 26, 1997, the Registrant announced 1996 fourth quarter and full
year financial results and that no distributions are expected to be made during
1997. Reference is made to the press release, dated March 26, 1997, annexed
hereto as Exhibit 20, for information regarding the announcement.
ITEM 7. EXHIBITS.
EXHIBIT NO. DESCRIPTION OF DOCUMENT
----------- -----------------------
20 Press Release, dated March 26, 1997.
PAGE
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
---------------------------------
John P. Saldarelli
Secretary and Treasurer
Date: March 26, 1997
PAGE
EXHIBIT INDEX
--------------
EXHIBIT NUMBER DESCRIPTION PAGE NO.
-------------- ----------- --------
20 Press Release, dated March 26, 1997. 5
PAGE
EXHIBIT 20
----------
Contact: John P. Saldarelli
Secretary and Treasurer
(914) 242-7700
FOR IMMEDIATE RELEASE
---------------------
AMERICAN REAL ESTATE PARTNERS, L.P.
-----------------------------------
REPORTS FOURTH QUARTER AND FULL YEAR RESULTS
--------------------------------------------
AND THAT NO DISTRIBUTIONS ARE EXPECTED TO BE MADE IN 1997
---------------------------------------------------------
Mount Kisco, New York, March 26, 1997 -- American Real Estate Partners, L.P.
("AREP") (NYSE:ACP) today reported the following fourth quarter and full year
financial results:
FOURTH QUARTER ENDED DECEMBER 31, 1996 1995
- --------------------------------- ---- ----
(UNAUDITED)
Revenues $17,446,193 $17,242,450
Earnings before property transactions $ 8,294,807 $ 7,376,398
Provisions for loss on real estate (760,000) (157,149)
Gain on sales and disposition of real estate 5,415,407 678,721
Extraordinary gain from early extinguishment
of debt 29,884 -
----------- -----------
Net earnings $12,980,098 $ 7,897,970
=========== ===========
Net earnings per L.P. unit:
Before extraordinary item $ .45 $ .27
Extraordinary item - -
-------------- --------------
Net earnings $ .45 $ .27
============== ==============
Weighted average units and equivalent
units outstanding 28,032,628 28,213,363
=========== ===========
PAGE
YEAR ENDED DECEMBER 31, 1996 1995
- ----------------------- ---- ----
Revenues $71,773,403 $69,920,466
Earnings before property transactions $34,731,813 $30,832,876
Provisions for loss on real estate (935,000) (768,701)
Gain on sales and disposition of real estate 24,516,867 5,091,445
Extraordinary loss from early extinguishment (491,628) -
of debt ----------- ------------
Net earnings $57,822,052 $35,155,620
=========== ===========
Net earnings per L.P. unit:
Before extraordinary item $ 2.04 $ 1.33
Extraordinary item (.02) -
--------------- --------------
Net earnings $ 2.02 $ 1.33
Weighted average units and equivalent
units outstanding 28,023,641 27,427,389
=============== ==============
*** Text follows ***
AMERICAN REAL ESTATE PARTNERS, L.P.
MARCH 26, 1997
EARNINGS RELEASE TEXT
Earnings before property transactions for the fourth quarter of 1996 increased
by approximately $918,000. Non-recurring gains on sales and disposition of
real estate for the fourth quarter of 1996 increased by approximately
$4,737,000. Earnings before property transactions for the year ended December
31, 1996 increased by approximately $3,899,000. Non-recurring gains on sales
and disposition of real estate for the year ended December 31, 1996 increased
by approximately $19,425,000.
AREP also announced that no distributions are expected to be made in 1997. 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 improvements 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 23% of AREP's net annual
rentals from its portfolio will be due for renewal, and by the end of the year
2002, 42% of such rentals will be due for renewal. In addition, AREP noted
that net operating cash flow in 1996 was approximately break even, after
payment of approximately $34.6 million of periodic principal payments and
maturing debt obligations, capital expenditures and creation of additional cash
reserves of approximately $1.5 million. No distributions were made to
unitholders during 1996.
AREP stated that it continues to believe excess cash should be used to enhance
long-term unitholder value through investment in companies with assets
undervalued by the market. AREP believes that in the real estate area it
should focus on diversifying its portfolio and seek to make acquisitions of
land development companies and other real estate operating companies which may
have significant assets under development and may enhance its ability to
develop and manage these properties. These types of investments may involve
debt restructuring, capital improvements and active asset management, and by
their nature 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. Therefore,
AREP's investment strategy continues to include the retention of capital
transaction and refinancing proceeds. AREP believes that this strategy will
not only allow it to continue to strengthen AREP's balance sheet but also will
provide AREP with opportunities to enhance its operating cash flow, and thereby
will be a factor in increasing net operating cash flow from the "break even"
(as mentioned above) that it has been at for the past several years.
American Real Estate Partners, L.P. is a master limited partnership primarily
engaged in acquiring and managing real estate investments, with the primary
focus on office, retail, industrial, hotel and residential properties.
