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): May 9, 2007
American
Real Estate Partners, L.P.
(Exact
name of registrant as specified in its charter)
|
Delaware
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1-9516
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13-3398766
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|
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification
No.)
|
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767
Fifth Avenue, Suite 4700, New York, NY
10153
|
|
(Address
of Principal Executive Offices)
(Zip
Code)
|
Registrant’s
Telephone Number, Including Area Code: (212)
702-4300
N/A
(Former
Name or Former Address, if Changed Since Last Report)
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:
|
o
|
Written
communication pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Section
2 - Financial Information
Item
2.02 Results of Operations and Financial Condition
The
following information is being furnished pursuant to Item 2.02, “Results of
Operations and Financial Condition.”
On
May 9,
2007, American Real Estate Partners, L.P. (“AREP”) issued a press release
setting forth AREP’s first quarter 2007 financial results. A copy of AREP’s
press release is attached as Exhibit 99.1.
Exhibit
Index
| 99.1 |
Press
Release dated May 9, 2007
|
[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.
|
AMERICAN
REAL ESTATE PARTNERS, L.P.
(Registrant)
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||
| |
|
|
| By: | American Property Investors, Inc.,
its
General Partner
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|
| By: | /s/ Andrew R. Skobe | |
|
Andrew
R. Skobe
Chief
Financial Officer
American
Property Investors, Inc.,
the
General Partner of
American
Real Estate Partners, L.P.
|
||
|
Title
|
||
Date: May
9,
2007
EXHIBIT
99.1
Investor
Contact:
Andrew
Skobe
Interim
CFO
(212)
702-4300
For
Release: May 9, 2007
American
Real Estate Partners, L.P. Reports First-Quarter Financial
Results
and
a 50% Increase in its Quarterly Distribution Policy
| · |
Revenues
of $351.4 million, an increase of $1.2 million from Q1
2006
|
| · |
Earnings
of $96.6 million, an increase of $46.8 million from Q1
2006
|
| · |
Investment
gains of $79.4 million, an increase of $61.1 million from Q1
2006
|
| · |
Board
of Directors approved $0.15 per depositary unit quarterly
distribution
|
| · |
Enhanced
liquidity by issuing $500 million of additional
debt
|
New
York, NY -
American Real Estate Partners, L.P. (“AREP”) (NYSE: ACP) today reported first quarter 2007 earnings of $96.6 million, or $1.53 per depositary unit,
compared to first quarter 2006 earnings of $49.7 million, or $0.79 per
depositary unit. AREP also announced that the board of directors of its general
partner, American Property Investors, Inc, has increased AREP’s quarterly
distribution policy from $0.10 to $0.15 per depositary unit.
Three
Months Ended March 31, 2007
For
the
first quarter of 2007, revenues increased by $1.2 million to $351.4 million
from
the first quarter of 2006. This increase was primarily due to increased
Gaming sales of $26.9 million resulting from the inclusion of revenues from
the
Aquarius Casino Resort which was acquired on May 19, 2006, and increased
revenues from Real Estate property development activities, substantially offset
by reduced sales of $32.9 million from our Home Fashion segment.
AREP
reported an operating loss of $19.2 million for the first quarter of 2007
compared to operating loss of $27.0 million in the first quarter of 2006. The
decrease in operating loss was primarily attributable to the inclusion of
operating results from the Aquarius Casino Resort and a decrease in Holding
Company expenses due largely to the impact of a compensation charge related
to
the cancellation of unit options in the first quarter of 2006.
EXH-1
The
following table presents results for the first quarter of 2007 and 2006 by
segment and for discontinued operations (in millions):
|
Depreciation,
Depletion &
|
|||||||||||||
|
Operating
Income / (Loss)
|
Amortization
|
||||||||||||
|
For
three months:
|
2007
|
|
2006
|
|
2007
|
|
2006
|
||||||
|
Gaming
(1)
|
$
|
23.2
|
$
|
18.6
|
$
|
8.6
|
$
|
5.8
|
|||||
|
Real
Estate
|
4.3
|
3.5
|
1.6
|
1.3
|
|||||||||
|
Home
Fashion
|
(39.0
|
)
|
(38.0
|
)
|
5.1
|
10.4
|
|||||||
|
Holding
Company
|
(7.7
|
)
|
(11.1
|
)
|
1.0
|
1.0
|
|||||||
|
Total
|
$
|
(19.2
|
)
|
$
|
(27.0
|
)
|
$
|
16.3
|
$
|
18.5
|
|||
|
Discontinued
Ops.
|
$
|
1.1
|
$
|
66.7
|
$
|
0.2
|
$
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28.1
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|||||
|
(1)
Includes
Aquarius in the first quarter of
2007.
|
Gaming
AREP’s
wholly owned subsidiary, American Casino & Entertainment Properties LLC,
(“ACEP”) 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. On April 22, 2007, we entered
into
an agreement to sell ACEP and all of its assets (see Subsequent
Events).
For
the
first quarter of 2007,
AREP’s
Gaming
segment,
excluding the Aquarius, had net revenues of $84.1 million, a decrease of 2.2%
from the first quarter of 2006, operating income of $17.8 million, a decrease
of
4.4% from the first quarter of 2006. For the first quarter of 2007, depreciation
and amortization was $8.6 million including $2.1 million for
Aquarius.
Real
Estate
AREP’s
Real Estate segment is comprised of three groups: rental real estate, property
development and resort operations. For the first quarter of 2007, Real Estate
operations had revenues of $27.9 million, an increase of 34.8% from the first
quarter of 2006, operating income of $4.3 million, an increase of 22.9% from
the
first quarter of 2006, and depreciation and amortization of $1.6
million.
Home
Fashion
West
Point International, Inc. is engaged in the business of manufacturing,
sourcing, marketing and distributing bed and bath home fashion products. For
the
first quarter of 2007, AREP’s Home Fashion segment had revenues of $210.6
million, a decrease of 13.5% from the first quarter of 2006, an operating loss
of $39.0 million, an increase of 2.6% from the first quarter of 2006, and
depreciation and amortization of $5.1 million.
EXH-2
Holding
Company Activity
Total
general and administrative expenses incurred by the Holding Company was $7.7
million in the first quarter of 2007, a decrease of $3.4 million, or 31.1%,
from
$11.1 million incurred in the first quarter of 2006.
Discontinued
Operations
On
November 17, 2006, our indirect majority owned subsidiary, Atlantic Coast
Entertainment Holdings, Inc. or Atlantic Coast, completed the sale to Pinnacle
Entertainment, Inc., or Pinnacle, of the outstanding membership interests in
ACE
Gaming LLC or ACE, the owner of The Sands Hotel and Casino, or The Sands, in
Atlantic City, New Jersey, and 100% of the equity interests in certain
subsidiaries of American Real Estate Holdings, LP that owned parcels of real
estate adjacent to The Sands, including the Traymore site, to
Pinnacle.
On
November 21, 2006, our indirect wholly owned subsidiary, AREP O & G Holdings
LLC, consummated the sale of all of the issued and outstanding membership
interests of NEG Oil & Gas LLC, or NEG Oil & Gas, to SandRidge Energy,
Inc. or SandRidge, formerly Riata Energy, Inc.
Subsequent
Events
On
April
4, 2007, our subsidiaries signed agreements to sell their entire position in
the
common stock of SandRidge to a consortium of investors in a series of private
transactions. The per share selling price was $18, and total cash consideration
received at closing was approximately $243.2 million.
In
April
2007, we sold an aggregate of $600.0 million of Variable Rate Senior Convertible
Notes due 2013, or the Notes. The Notes were sold in a private placement
pursuant to Section 4(2) of the Securities Act. The Notes bear interest at
a
rate of three month LIBOR minus 125 points, but no less than 4.0% nor higher
than 5.5%, and are convertible into depositary units of AREP at a conversion
price of $132.595 per share, subject to adjustments in certain
circumstances.
On
April
22, 2007, American Entertainment Properties Corp. or AEP, a wholly owned
indirect subsidiary of AREP, entered into a Membership Interest Purchase
Agreement with W2007/ACEP Holdings, LLC, an affiliate of Whitehall Street
Real
Estate Funds, a series of real estate investment funds affiliated with Goldman,
Sachs & Co., to sell all of the issued and outstanding membership interests
of ACEP, which comprises our gaming operations, for $1.3 billion, plus or
minus
certain adjustments such as working capital, as more fully described in the
agreement. Pursuant to the terms of the agreement, AEP is also responsible
to
pay off ACEP debt.
EXH-3
Quarterly
Distribution
AREP’s
quarterly cash distribution of $0.15 per unit on its depositary units is payable
on June 1, 2007 to depositary unitholders of record at the close of business
on
May 22, 2007. In addition to the cash distribution to unitholders, AREP will
also make a $0.05 per depositary unit equivalent distribution to holders of
its
Variable Rate Senior Convertible Notes due 2013 based on a formula set forth
in
the Indenture governing the Notes. The payment of future distributions will
be
determined by the board of directors of AREP’s general partner.
Conference
Call Information
AREP
will
discuss first quarter results on a conference call and Webcast on Thursday,
May
10, 2007 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 toll-free dial-in number for the conference
call in the US is (866) 558-6338. The international number is 1-213-785-2437.
The access code for both is 5755747.
*
* *
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.
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.
EXH-4
APPENDIX
I
CONSOLIDATED
STATEMENT OF OPERATIONS
In
millions of dollars except per unit data
|
Three
Months Ended
|
|
||||||
|
|
|
March
31,
|
|
||||
|
|
|
2007
|
|
2006
|
|
||
|
|
|
|
|
(Restated)
|
|||
|
Revenues
|
$
|
351.4
|
$
|
350.1
|
|||
|
Operating
loss
|
$
|
(19.2
|
)
|
$
|
(27.0
|
)
|
|
|
Interest
expense
|
(33.0
|
)
|
(25.2
|
)
|
|||
|
Interest
income
|
31.5
|
11.6
|
|||||
|
Other
income (expense), net
|
84.8
|
21.3
|
|||||
|
Pre-tax
income (loss)
|
64.1
|
(19.3
|
)
|
||||
|
Income
tax expense
|
(7.0
|
)
|
(5.2
|
)
|
|||
|
Minority
interests
|
11.6
|
15.1
|
|||||
|
Income
(loss) from continuing operations
|
68.7
|
(9.4
|
)
|
||||
|
Income
from discountinued operations
|
27.9
|
59.1
|
|||||
|
Net
earnings
|
$
|
96.6
|
$
|
49.7
|
|||
|
Net
earnings attributable to:
|
|||||||
|
Limited
partners
|
$
|
94.7
|
$
|
48.7
|
|||
|
General
partners
|
1.9
|
1.0
|
|||||
|
Income
tax expense
|
96.6
|
49.7
|
|||||
|
Net
earnings (loss) per LP unit:
|
|||||||
|
Basic
earnings (loss):
|
|||||||
|
Income
(loss) from continuing operations
|
$
|
1.09
|
$
|
(0.15
|
)
|
||
|
Income
from discontinued operations
|
0.44
|
0.94
|
|||||
|
Basic
earnings per LP unit
|
$
|
1.53
|
$
|
0.79
|
|||
|
Weighted
average units
|
|||||||
|
Outstanding
|
61,856,830
|
61,856,830
|
|||||
|
Diluted
earnings (loss):
|
|||||||
|
Income
(loss) from continuing operations
|
$
|
1.09
|
$
|
(0.15
|
)
|
||
|
Income
from discontiuned operations
|
0.44
|
0.94
|
|||||
|
Diluted
earnings per L.P. unit
|
$
|
1.53
|
$
|
0.79
|
|||
|
Weighted
average units and
|
|||||||
|
equivalent
units outstanding
|
61,856,830
|
61,856,830
|
|||||
APP-I-1
APPENDIX
II
CONSOLIDATED
SUMMARY BALANCE SHEET
The
following table presents AREP's consolidated summary balance sheet
data
($
in millions)
|
March
31,
|
December
31,
|
||||||
|
|
2007
|
2006
|
|||||
|
|
|
|
|||||
|
Assets
|
|||||||
|
Cash
and cash equivalents
|
$
|
2,331.5
|
$
|
1,912.2
|
|||
|
Investments
|
563.6
|
539.1
|
|||||
|
Other
current assets
|
481.6
|
557.0
|
|||||
|
Assets
of disc. ops. available for sale
|
48.2
|
47.5
|
|||||
|
Total
current assets
|
3,424.9
|
3,055.8
|
|||||
|
Non-current
investments
|
201.9
|
179.9
|
|||||
|
Property,
plant and equipment
|
898.6
|
907.1
|
|||||
|
Intangible
assets
|
25.8
|
25.9
|
|||||
|
Other
assets
|
71.5
|
76.0
|
|||||
|
Total
assets
|
$
|
4,622.7
|
$
|
4,244.7
|
|||
|
Liabilities
|
|||||||
|
Current
liabilities
|
$
|
258.9
|
$
|
317.0
|
|||
|
Long-term
debt
|
1,675.5
|
1,185.0
|
|||||
|
Other
non-current liabilities
|
23.7
|
22.2
|
|||||
|
Preferred
limited partnership units
|
119.1
|
117.7
|
|||||
|
Total
liabilities
|
2,077.2
|
1,641.9
|
|||||
|
Minority
interests
|
198.0
|
292.2
|
|||||
|
Partners'
equity
|
2,347.5
|
2,310.6
|
|||||
|
Total
liabilities and partners' equity
|
$
|
4,622.7
|
$
|
4,244.7
|
|||
APP-II-1