(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the fiscal year ended December 31, 2004 | ||
or | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the transition period from to |
Delaware | 13-3398766 | |
(State or other jurisdiction of
incorporation or organization) |
(.I.R.S. Employer
Identification No.) |
|
100 South Bedford Road, Mt. Kisco, New York | 10549 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered | |
Depositary Units Representing Limited Partner Interests | New York Stock Exchange | |
5% Cumulative Pay-in-Kind Redeemable Preferred Units
Representing Limited Partner Interests
|
New York Stock Exchange |
1
Item 1. | Business. |
| American Casino & Entertainment Properties LLC. On May 26, 2004, our subsidiary, American Casino & Entertainment Properties LLC, or ACEP, acquired two Las Vegas hotels and casinos, Arizona Charlies Decatur and Arizona Charlies Boulder for aggregate consideration of $125.9 million. At that date, AREH transferred 100% of the common stock of Stratosphere Corporation, which owns and operates the Stratosphere Hotel in Las Vegas, Nevada, to ACEP. | |
| Grand Harbor and Oak Harbor. In July 2004, we acquired Grand Harbor and Oak Harbor, two waterfront communities in Vero Beach, Florida. The communities include three golf courses, a tennis complex, fitness center, beach club and an assisted living facility. In addition, we acquired approximately 400 acres of land to the north of Grand Harbor which currently has entitlements to build approximately 600 homes and an 18 hole golf course. The total purchase price was approximately $75.0 million. | |
| NEG Holding LLC. We currently own 50.01% of the outstanding common stock of National Energy Group, Inc., or NEG, and all of its approximately $148.6 million aggregate principal amount of notes. NEG owns a membership interest in NEG Holding LLC. NEG Holding owns 100% of NEG Operating LLC, an oil and gas exploration and production company. We have entered into an agreement to acquire the other membership interest in NEG Holding for an aggregate of up to 11,344,828 of depositary units, valued at $29.00 per unit, or an aggregate of up to $329 million. The number of depositary units is subject to reduction based upon NEG Holdings oil and gas reserve reports, as of January 21, 2005, to be prepared by an independent reserve engineering firm. | |
| TransTexas Gas Corporation. On December 6, 2004, we purchased $27.5 million aggregate principal amount of term notes issued by TransTexas, or the TransTexas Notes, which constitutes 100% of the outstanding term notes of TransTexas. We have entered into an agreement to acquire 100% of the equity of TransTexas, an oil and gas exploration and production company, for a purchase price of up to |
2
$180.0 million payable in cash. The purchase price is subject to reduction based upon TransTexas Gas Corporations oil and gas reserve reports as of January 21, 2005, to be prepared by an independent reserve engineering firm. | ||
| Panaco, Inc. On December 6, 2004, we purchased $38.0 million aggregate principal amount of term loans issued by Panaco, which constitutes 100% of the outstanding term loans of Panaco, or the Panaco Debt. We have entered into an agreement to acquire 100% of the equity of Panaco, an oil and gas exploration and production company, for up to 4,310,345 depositary units, valued at $29.00 per unit, or an aggregate of up to $125.0 million. The number of units to be issued is subject to reduction based upon Panacos oil and gas reserve reports as of January 21, 2005, to be prepared by an independent reserve engineering firm. | |
| GB Holdings, Inc. We currently own approximately 36.3% of the outstanding common stock of GB Holdings. On December 27, 2004, we purchased $37.0 million principal amount of the 3% notes due September 2008 issued by GB Holdings subsidiary, Atlantic Coast Entertainment Holdings, Inc., or Atlantic Holdings, bringing our ownership of that debt to approximately $63.9 million principal amount, or approximately 96.4% of the principal amount outstanding. The notes may be paid in full, at the option of the holders of a majority of their principal amount, with common stock of Atlantic Holdings. We also own warrants to purchase, upon the occurrence of certain events, approximately 10.0% of the fully diluted common stock of Atlantic Holdings. Atlantic Holdings owns 100% of ACE Gaming LLC, the owner and operator of The Sands Hotel and Casino located in Atlantic City, New Jersey. We have entered into an agreement to acquire an additional approximate 41.2% of the outstanding common stock of GB Holdings and warrants to purchase, upon the occurrence of certain events, an additional approximate 11.3% of the fully diluted common stock of Atlantic Holdings for an aggregate of 413,793 depositary units, valued at $29.00 per unit, or an aggregate of $12.0 million plus up to an additional 206,897 depositary units, valued at $29.00 per unit, or an additional $6.0 million, if GB Holdings meets certain earnings targets during 2005 and 2006. Upon completion of the acquisition, we will own approximately 77.5% of the outstanding GB Holdings common stock and warrants to purchase, upon the occurrence of certain events, approximately 21.3% of the fully diluted common stock of Atlantic Holdings. Warrants to purchase, upon the occurrence of certain events, approximately 27.5% of the fully diluted common stock of Atlantic Holdings are currently outstanding of which we own, currently, warrants to purchase up to 10.0% of the fully diluted common stock of Atlantic Holdings. Under certain circumstances, the Atlantic Holdings notes are convertible into approximately 47.3% of the fully diluted common stock of Atlantic Holdings. If all outstanding notes were converted and warrants exercised, giving effect to the acquisition, we would own approximately 63.4% of the Atlantic Holdings common stock, GB Holdings would own approximately 28.8% of the Atlantic Holdings common stock and the remaining shares would be owned by the public. |
3
Oil and Gas |
TransTexas Gas Corporation |
4
NEG Holding LLC |
Panaco, Inc. |
5
Gaming and Entertainment |
GB Holdings, Inc. (The Sands) |
6
Audit Committee Approval |
Unitholder Approval |
7
8
Stratosphere |
9
Arizona Charlies Decatur |
10
Arizona Charlies Boulder |
11
The Sands Hotel and Casino |
| The indenture for the 11% secured notes due September 2005 was amended to remove certain provisions and covenants and release the liens on The Sands Hotel and Casinos assets that secured the notes; | |
| The Sands Hotel and Casinos assets were transferred to a wholly-owned subsidiary of Atlantic Holdings, ACE Gaming; and | |
| The 3% notes due September 2008 were secured by a pledge of all of the assets of ACE Gaming, including The Sands Hotel and Casino. |
National Energy Group, Inc. |
12
13
TransTexas and Panaco |
| the purchase for approximately $205.8 million of an aggregate of approximately $278.1 million principal amount of secured bank debt of WestPoint Stevens Inc. Approximately $193.6 million principal amount is secured by a first priority lien of certain assets of WestPoint, and approximately $84.5 million principal amount is secured by a second priority lien. WestPoint currently is operating as a debtor in possession under Chapter 11 of the U.S. Bankruptcy Code; |
14
| the purchase of an aggregate of approximately $71.8 million of secured bank debt of Union Power Partners L.P. and Panda Gila River L.P., independent power producers, for a purchase price of approximately $39.3 million. No interest is currently being received on this debt; | |
| the sale, for $82.3 million, of approximately $86.9 million principal amount of corporate debt securities which we purchased for approximately $45.1 million, recognizing a gain of $37.2 million; and | |
| the short sale of approximately 2.5 million shares of common stock of a company in bankruptcy. |
15
Real Estate |
16
Hotel and Casino Operations |
Rental Real Estate and Real Estate Development |
Environmental Matters |
17
Other Property Matters |
Nevada |
Introduction |
Policy Concerns of Gaming Laws |
| preventing unsavory or unsuitable persons from being directly or indirectly involved with gaming at any time or in any capacity; | |
| establishing and maintaining responsible accounting practices and procedures; | |
| maintaining effective controls over the financial practices of licensees, including establishing minimum procedures for internal fiscal affairs, and safeguarding assets and revenue, providing reliable recordkeeping and requiring the filing of periodic reports with the Nevada Gaming Authorities; |
18
| preventing cheating and fraudulent practices; and | |
| providing a source of state and local revenue through taxation and licensing fees. |
Owner and Operator Licensing Requirements |
Our Registration Requirements |
Individual Licensing Requirements |
19
Consequences of Violating Gaming Laws |
Requirements for Beneficial Securities Holders |
| voting on all matters voted on by stockholders or interest holders; | |
| making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in its management, policies or operations; and | |
| other activities that the Nevada Gaming Commission may determine to be consistent with such investment intent. |
Consequences of Being Found Unsuitable |
20
| pay that person any dividend or interest upon any voting securities; | |
| allow that person to exercise, directly or indirectly, any voting right held by that person; | |
| pay remuneration in any form to that person for services rendered or otherwise; or | |
| fail to pursue all lawful efforts to require the unsuitable person to relinquish such persons voting securities including, if necessary, the immediate purchase of the voting securities for cash at fair market value. |
Gaming Laws Relating to Securities Ownership |
| pays to the unsuitable person any dividend, interest or any distribution whatsoever; | |
| recognizes any voting right by the unsuitable person in connection with the securities; | |
| pays the unsuitable person remuneration in any form; or | |
| makes any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation or similar transaction. |
Approval of Public Offerings |
21
Approval of Changes in Control |
| merger; | |
| consolidation; | |
| stock or asset acquisitions; | |
| management or consulting agreements; or | |
| any act or conduct by a person by which the person obtains control of us. |
Approval of Defensive Tactics |
| assure the financial stability of corporate gaming operators and their affiliates; | |
| preserve the beneficial aspects of conducting business in the corporate form; and | |
| promote a neutral environment for the orderly governance of corporate affairs. |
Fees and Taxes |
22
| a percentage of gross revenues received; | |
| the number of gaming devices operated; or | |
| the number of table games operated. |
Foreign Gaming Investigations |
| knowingly violates any laws of the foreign jurisdiction pertaining to the foreign gaming operation; | |
| fails to conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming operations; | |
| engages in any activity or enters into any association that is unsuitable because it poses an unreasonable threat to the control of gaming in Nevada, reflects, or tends to reflect, discredit or disrepute upon the State of Nevada or gaming in Nevada, or is contrary to the gaming policies of Nevada; | |
| engages in activities or enters into associations that are harmful to the State of Nevada or its ability to collect gaming taxes and fees; or | |
| employs, contracts with or associates with a person in the foreign operation who has been denied a license or finding of suitability in Nevada on the ground of unsuitability. |
License for Conduct of Gaming and Sale of Alcoholic Beverages |
New Jersey |
Introduction |
23
New Jersey Gaming Regulations |
| the granting and renewal of casino licenses; | |
| the suitability of the approved hotel facility, and the amount of authorized casino space and gaming units permitted therein; | |
| the qualification of natural persons and entities related to the casino licensee; | |
| the licensing of certain employees and vendors of casino licensees; | |
| the rules of the games; | |
| the selling and redeeming of gaming chips; | |
| the granting and duration of credit and the enforceability of gaming debts; | |
| management control procedures, accounting and cash control methods and reports to gaming agencies; | |
| the security standards; | |
| the manufacture and distribution of gaming equipment; and | |
| the simulcasting of horse races by casino licensees, advertising, entertainment and alcoholic beverages. |
Casino Control Commission |
Casino License |
24
Control Persons |
Financial Sources |
Institutional Investors |
25
Ownership and Transfer of Securities |
26
Conservatorship |
Oil and Gas |
Exploration and Production |
27
Environmental Protection and Occupational Safety |
28
Item 2. | Properties. |
Number of | Average Net Effective | |||||||
Type of Property | Properties | Rent Per Square Foot(1) | ||||||
Retail
|
28 | $ | 5.29 | |||||
Industrial
|
13 | $ | 2.07 | |||||
Office
|
18 | $ | 10.01 | |||||
Supermarkets
|
4 | $ | 6.44 | |||||
Banks
|
3 | $ | 3.11 | |||||
Other
|
5 | N/A |
(1) | Based on net-lease rentals. |
Number of | |||||
Location of Property | Properties | ||||
United States:
|
|||||
Southeast
|
35 | ||||
Northeast
|
14 | ||||
South Central
|
3 | ||||
Southwest
|
1 | ||||
North Central
|
17 | ||||
Northwest
|
1 |
29
30
Item 3. | Legal Proceedings. |
Item 4. | Submission of Matters to a Vote of Security Holders. |
31
Item 5. | Market for Registrants Common Equity, Related Security Holder Matter and Issuer Purchases of Equity Securities. |
Quarter Ended: | High | Low | ||||||
March 31, 2003
|
$ | 10.94 | $ | 9.26 | ||||
June 30, 2003
|
12.45 | 10.15 | ||||||
September 30, 2003
|
12.80 | 10.65 | ||||||
December 31, 2003
|
17.20 | 11.55 | ||||||
March 31, 2004
|
$ | 17.19 | $ | 14.46 | ||||
June 30, 2004
|
21.80 | 15.25 | ||||||
September 30, 2004
|
22.93 | 18.41 | ||||||
December 31, 2004
|
29.23 | 20.00 |
32
Item 6. | Selected Financial Data. |
Year Ended December 31, | |||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||
(In $000s, except per unit amounts) | |||||||||||||||||||||
Total revenues
|
$ | 453,581 | $ | 370,469 | $ | 435,729 | $ | 416,624 | $ | 378,957 | |||||||||||
Operating income
|
$ | 87,814 | $ | 68,213 | $ | 78,817 | $ | 64,463 | $ | 65,175 | |||||||||||
Other gains and (losses):
|
|||||||||||||||||||||
Gain on sale of marketable equity and debt securities
|
40,159 | 2,607 | | 6,749 | | ||||||||||||||||
Unrealized losses on securities sold short
|
(23,619 | ) | | | | | |||||||||||||||
Impairment loss on equity interest in GB Holdings, Inc.
|
(15,600 | ) | | | | | |||||||||||||||
Gain (loss) on sale of other assets
|
| (1,503 | ) | (353 | ) | 27 | | ||||||||||||||
Gain on sales and disposition of real estate
|
5,262 | 7,121 | 8,990 | 1,737 | 6,763 | ||||||||||||||||
Write-down of marketable equity and debt securities and other
investments
|
| (19,759 | ) | (8,476 | ) | | | ||||||||||||||
Gain (loss) on limited partnership interests
|
| | (3,750 | ) | | 3,461 | |||||||||||||||
Minority interest
|
| | (1,943 | ) | (450 | ) | (2,747 | ) | |||||||||||||
Income from continuing operations before income taxes
|
94,016 | 56,679 | 73,285 | 72,526 | 72,652 | ||||||||||||||||
Income tax (expense) benefit
|
(16,763 | ) | 1,573 | (10,096 | ) | 25,664 | 379 | ||||||||||||||
Income from continuing operations
|
77,253 | 58,252 | 63,189 | 98,190 | 73,031 | ||||||||||||||||
33
Year Ended December 31,
2004
2003
2002
2001
2000
(In $000s, except per unit amounts)
8,523
8,419
7,507
7,419
7,441
75,197
3,353
83,720
11,772
7,507
7,419
7,441
$
160,973
$
70,024
$
70,696
$
105,609
$
80,472
$
152,507
$
59,360
$
63,168
$
66,190
$
72,225
8,466
10,664
7,528
39,419
8,247
$
160,973
$
70,024
$
70,696
$
105,609
$
80,472
$
1.53
$
0.99
$
1.11
$
1.18
$
1.32
1.78
0.25
0.16
0.16
0.16
$
3.31
$
1.24
$
1.27
$
1.34
$
1.48
46,098,284
46,098,284
46,098,284
46,098,284
46,098,284
$
1.46
$
0.92
$
0.99
$
1.06
$
1.16
1.59
0.21
0.13
0.13
0.13
$
3.05
$
1.13
$
1.12
$
1.19
$
1.29
51,542,312
54,489,943
56,466,698
55,599,112
56,157,079
$
253,790
$
114,318
$
131,678
$
143,037
$
125,596
$
16,221
$
33,324
$
21,896
$
68,199
$
52,598
34
At December 31,
2004
2003
2002(1)
2001(1)
2000
(in $000s)
$
762,708
$
487,498
$
79,540
$
83,975
$
172,621
339,492
340,229
335,121
339,201
264,566
102,331
61,573
336,051
313,641
475,267
245,948
50,328
54,216
10,529
4,289
2,263,057
1,646,606
1,706,031
1,721,100
1,566,597
91,896
180,989
171,848
166,808
182,049
215,000
350,598
106,731
101,649
$
1,303,126
$
1,270,214
$
1,245,437
$
1,136,452
$
1,154,400
(1) | On July 1, 2003, we adopted Statement of Financial Accounting Standards No. 150 (SFAS 150), Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity . SFAS 150 requires that a financial instrument, which is an unconditional obligation, be classified as a liability. Previous guidance required an entity to include in equity financial instruments that the entity could redeem in either cash or stock. Pursuant to SFAS 150, our preferred units, which are an unconditional obligation, have been reclassified from Partners equity to a liability account in the consolidated balance sheets and the preferred pay-in-kind distribution for the period from July 1, 2003 to December 31, 2003 of $2.4 million and all future distributions have been and will be recorded as Interest expense in the consolidated statements of earnings. |
(2) | EBITDA represents net earnings before interest expense, income tax (benefit) expense and depreciation, depletion and amortization, including provision for obligatory investments. We present EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies issuing debt, many of which present EBITDA when reporting their results. We present EBITDA on a consolidated basis. However, EBITDA does not reflect cash flows and we conduct substantially all of our operations through subsidiaries. The operating results of our subsidiaries may not be sufficient to make distributions to us. In addition, our subsidiaries are not obligated to make funds available to us for payment on the notes or otherwise, and distributions and intercompany transfers from our subsidiaries to us may be restricted by applicable law or covenants contained in debt agreements and other agreements to which these subsidiaries currently may be subject or enter into in the future. The terms of any borrowings of our subsidiaries or other entities in which we own equity may restrict dividends, distributions or loans to us. |
EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under generally accepted accounting principles, or GAAP. For example, EBITDA: |
| does not reflect our cash expenditures, or future requirements for capital expenditures, or contractual commitments; | |
| does not reflect changes in, or cash requirements for, our working capital needs; and | |
| does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debts. |
Although depreciation, depletion and amortization are non-cash charges, the assets being depreciated, depleted or amortized often will have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements. Other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure. In addition, EBITDA does not reflect the |
35
impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations. | |
EBITDA is a measure of our performance that is not required by, or presented in accordance with, GAAP. EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net earnings, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA only supplementally. | |
The following table reconciles net earnings to EBITDA for the periods indicated: |
Year Ended December 31, | |||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||
Net earnings
|
$ | 160,973 | $ | 70,024 | $ | 70,696 | $ | 105,609 | $ | 80,472 | |||||||||||
Interest expense
|
46,099 | 21,103 | 27,297 | 36,577 | 20,057 | ||||||||||||||||
Income tax (benefit) expense
|
16,763 | (1,573 | ) | 10,096 | (25,664 | ) | 5,445 | ||||||||||||||
Depreciation, depletion and amortization, including provision
for obligatory investments
|
29,955 | 24,764 | 23,589 | 26,515 | 19,622 | ||||||||||||||||
EBITDA
|
$ | 253,790 | $ | 114,318 | $ | 131,678 | $ | 143,037 | $ | 125,596 | |||||||||||
Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations. |
36
37
Calendar Year 2004 Compared to Calendar Year 2003 |
38
39
Calendar Year 2003 Compared to Calendar Year 2002 |
40
41
Less Than | After | ||||||||||||||||||||
1 Year | 1-3 Years | 3-5 Years | 5 Years | Total | |||||||||||||||||
Mortgages payable
|
$ | 4.8 | $ | 40.9 | $ | 9.3 | $ | 36.9 | $ | 91.9 | |||||||||||
Senior secured notes payable
|
| | | 215.0 | 215.0 | ||||||||||||||||
Senior unsecured notes payable
|
| | | 353.0 | 353.0 | ||||||||||||||||
Senior debt interest
|
78.3 | 159.5 | 159.5 | 211.3 | 608.6 | ||||||||||||||||
Acquisition of TransTexas Gas Corp.
|
180.0 | | | | 180.0 | ||||||||||||||||
Construction and development obligations
|
55.0 | | | | 55.0 | ||||||||||||||||
Total
|
$ | 318.1 | $ | 200.4 | $ | 168.8 | $ | 816.2 | $ | 1,503.5 | |||||||||||
Mortgages |
Long-Term Debt |
42
43
Asset Sales and Purchases |
Capital Expenditures |
Leases |
Preferred Unit Distributions |
44
Cash and Cash Equivalents |
Acquisitions |
| $27.5 million aggregate principal amount of the TransTexas Notes for $28.2 million in cash, which included $0.7 million of accrued interest through December 6, 2004; | |
| All of the membership interests of Mid River, the assets of which consist of $38.0 million principal amount of Panaco Debt, and $0.1 million of accrued interest, through December 6, 2004, for $38.1 million in cash; and | |
| $37.0 million principal amount of Atlantic Holdings Notes for $36.0 million in cash. |
45
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of |
Commitments and Contingencies Litigation |
46
Marketable Equity and Debt Securities and Investment in U.S. Government and Agency Obligations |
Mortgages and Notes Receivable |
Revenue Recognition |
Casino Revenues and Promotional Allowances |
Income Taxes |
47
Properties |
General |
Certain of our management are committed to the management of other businesses. |
We may be subject to the pension liabilities of our affiliates. |
48
We are subject to the risk of possibly becoming an investment company. |
We may become taxable as a corporation. |
49
Real Estate Operations |
Our investment in property development may be more costly than anticipated. |
Competition for acquisitions could adversely affect us and new acquisitions may fail to perform as expected. |
We may not be able to sell our rental properties, which would reduce cash available for other purposes. |
We face potential adverse effects from tenant bankruptcies or insolvencies. |
50
The development of our New Seabury property may be limited by government authorities. |
We may be subject to environmental liability as an owner or operator of development and rental real estate. |
Hotel and Casino Operations |
The gaming industry is highly regulated. The gaming authorities and state and municipal licensing authorities have significant control over our operations. |
51
Rising operating costs for our gaming and entertainment properties could have a negative impact on our profitability. |
| potential changes in the tax or regulatory environment which impose additional restrictions or increase operating costs; | |
| our properties use significant amounts of electricity, natural gas and other forms of energy, and energy price increases may reduce our working capital; | |
| our Nevada properties use significant amounts of water and a water shortage may adversely affect our operations; | |
| an increase in the cost of health care benefits for our employees could have a negative impact on our profitability; | |
| some of our employees are covered by collective bargaining agreements and we may incur higher costs or work slow-downs or stoppages due to union activities; | |
| our reliance on slot machine revenues and the concentration of manufacturing of slot machines in certain companies could impose additional costs on us; and | |
| our insurance coverage may not be adequate to cover all possible losses and our insurance costs may increase. |
We face substantial competition in the hotel and casino industry. |
| we compete with many world class destination resorts with greater name recognition, different attractions, amenities and entertainment options; | |
| we compete with the continued growth of gaming on Native American tribal lands; | |
| the existence of legalized gambling in other jurisdictions may reduce the number of visitors to our properties; | |
| certain states have legalized, and others may legalize, casino gaming in specific venues, including race tracks and/or in specific areas, including metropolitan areas from which we traditionally attract customers; and | |
| our properties also compete and will in the future compete with all forms of legalized gambling. |
Economic downturns, terrorism and the uncertainty of war, as well as other factors affecting discretionary consumer spending, could reduce the number of our visitors or the amount of money visitors spend at our casinos. |
52
Our hotels and casinos may need to increase capital expenditures to compete effectively. |
Increased state taxation of gaming and hospitality revenues could adversely affect our hotel and casinos results of operations. |
Oil and Gas |
We face substantial risks in the oil and gas industry. |
| unexpected drilling conditions; | |
| pressure or irregularities in formation; | |
| equipment failures or repairs; | |
| fires or other accidents; | |
| adverse weather conditions; | |
| pipeline ruptures or spills; and | |
| shortages or delays in the availability of drilling rigs and the delivery of equipment. |
53
The oil and gas industry is subject to environmental regulation by state and federal agencies. |
We may experience difficulty finding and acquiring additional reserves and may be unable to compensate for the depletion of proved reserves. |
Difficulties in exploration and development could adversely affect our financial condition. |
54
Oil and gas prices are likely to be volatile. |
| domestic and foreign political conditions; | |
| the price and availability of domestic and imported oil and gas; | |
| the level of consumer and industrial demand; | |
| weather, domestic and foreign government relations; and | |
| the price and availability of alternative fuels and overall economic conditions. |
Operating hazards and uninsured risks are inherent to the oil and gas industry. |
Our use of hedging arrangements could adversely affect our results of operations. |
The oil and gas industry is highly competitive. |
55
Investments |
We may not be able to identify suitable investments, and our investments may not result in favorable returns or may result in losses. |
Our investments may be subject to significant uncertainties. |
fluctuation of interest rates; | |
lack of control in minority investments; | |
worsening of general economic and market conditions; | |
lack of diversification; | |
inexperience with non-real estate areas; | |
fluctuation of U.S. dollar exchange rates; and | |
adverse legal and regulatory developments that may affect particular businesses. |
Item 7A. | Quantitative and Qualitative Disclosure About Market Risks |
56
57
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
/s/ GRANT THORNTON LLP |
58
59
/s/
KPMG LLP
Table of Contents
December 31,
2004
2003
(In $000s except per
unit amounts)
ASSETS
$
762,708
$
487,498
96,840
52,583
2,248
55,826
123,001
19,856
15,058
51,575
43,420
3,912
5,738
58,021
128,813
10,429
2,685
2,982
1,131,275
791,918
5,491
8,990
245,948
50,328
106,537
43,459
85,281
131,618
49,118
76,443
289,360
298,703
50,132
41,526
21,038
3,833
115,075
24,696
87,800
69,346
10,603
30,854
65,399
74,892
$
2,263,057
$
1,646,606
LIABILITIES AND PARTNERS EQUITY
$
3,700
$
4,892
27,477
82,861
81,793
45,774
90,674
25,000
203,644
158,527
23,239
22,980
60,719
93,236
215,000
350,598
106,731
101,649
756,287
217,865
1,328,031
1,184,870
(12,984
)
97,265
(11,921
)
(11,921
)
1,303,126
1,270,214
$
2,263,057
$
1,646,606
60
Years Ended December 31,
2004
2003
2002
(In $000s except unit and
per unit amounts)
$
299,981
$
262,811
$
250,023
26,591
13,265
76,024
9,880
13,115
14,722
44,418
22,583
30,569
7,219
6,399
5,932
18,477
14,592
14,918
34,432
30,142
32,879
11,563
7,967
7,637
3,133
3,061
2,720
(2,113
)
(3,466
)
305
453,581
370,469
435,729
227,603
216,857
217,938
18,486
9,129
54,640
15,234
11,138
12,553
46,099
21,103
27,297
29,955
24,764
23,589
20,952
14,081
14,134
4,288
4,434
3,549
3,150
750
3,212
365,767
302,256
356,912
87,814
68,213
78,817
(1,503
)
(353
)
40,159
2,607
(23,619
)
(15,600
)
(19,759
)
(8,476
)
5,262
7,121
8,990
(3,750
)
(1,943
)
94,016
56,679
73,285
(16,763
)
1,573
(10,096
)
77,253
58,252
63,189
8,523
8,419
7,507
75,197
3,353
83,720
11,772
7,507
$
160,973
$
70,024
$
70,696
$
152,507
$
59,360
$
63,168
8,466
10,664
7,528
$
160,973
$
70,024
$
70,696
$
1.53
$
0.99
$
1.11
1.78
0.25
0.16
$
3.31
$
1.24
$
1.27
46,098,284
46,098,284
46,098,284
$
1.46
$
0.92
$
0.99
1.59
0.21
0.13
$
3.05
$
1.13
$
1.12
51,542,312
54,489,943
56,466,698
61
Limited Partners
Equity
General
Partners
Held in Treasury
Total
Equity
Depositary
Preferred
Partners
(Deficit)
Units
Units
Amounts
Units
Equity
$
58,846
$
996,701
$
92,198
$
(11,921
)
1,137
1,135,824
7,528
63,168
70,696
211
10,384
10,595
131
6,451
6,582
(5
)
(237
)
(242
)
7,865
79,766
87,631
21,151
21,151
(4,610
)
4,610
831
831
88,693
1,071,857
96,808
(11,921
)
1,137
1,245,437
10,664
59,360
70,024
15
746
761
183
8,991
9,174
(6
)
(274
)
(280
)
10,856
68,823
79,679
(2,391
)
2,391
524
46,581
47,105
(2,808
)
(2,808
)
(99,199
)
(99,199
)
97,265
1,184,870
(11,921
)
1,137
1,270,214
8,466
152,507
160,973
(190
)
(9,378
)
(9,568
)
1
32
33
8,277
143,161
151,438
(17,916
)
(17,916
)
22,800
22,800
(125,900
)
(125,900
)
2,490
2,490
$
(12,984
)
$
1,328,031
$
$
(11,921
)
1,137
$
1,303,126
62
Years Ended December 31,
2004
2003
2002
(In $000s)
$
77,253
$
58,252
$
63,189
29,955
24,764
23,589
5,082
2,450
(40,159
)
(2,607
)
23,619
15,600
(5,262
)
(7,121
)
(8,990
)
3,750
96
1,503
353
3,150
750
3,212
19,759
8,476
1,943
2,113
3,466
(305
)
(2,038
)
(2,038
)
(2,038
)
(34,432
)
(30,142
)
(32,879
)
13,946
(5,875
)
9,785
(10,234
)
(299
)
2,944
(123,001
)
(1,626
)
(4,106
)
24,215
(4,798
)
(13,095
)
92,476
(37,328
)
271
41,740
8,333
97,515
83,720
11,772
7,507
1,104
5,167
4,521
(75,197
)
(3,353
)
9,627
13,586
12,028
51,367
21,919
109,543
2,942
(28,491
)
(23,200
)
49,130
12,200
23,000
16,790
15,290
20,513
4,219
5,310
5,941
(245,166
)
(65,500
)
(36,000
)
(125,900
)
(16,203
)
(32,911
)
(21,715
)
(16,463
)
(14,583
)
(18,226
)
(61,845
)
(18
)
(413
)
(181
)
(40,757
)
274,478
(22,410
)
(45,140
)
(4,415
)
90,614
3,843
250,000
(44,744
)
788
(148,101
)
15,979
18,229
21,653
40,506
(68,491
)
(194
)
560
197
(442,955
)
366,148
(132,078
)
63
Years Ended December 31,
2004
2003
2002
134,789
5,336
(308,166
)
371,484
(132,078
)
(17,916
)
22,800
598
(2,904
)
(5,000
)
7,780
17,220
565,409
(24,925
)
10,000
20,000
12,700
(3,837
)
(462
)
(5,248
)
(6,484
)
(7,198
)
(18,111
)
242
532,009
14,555
18,100
275,210
407,958
(4,435
)
487,498
79,540
83,975
$
762,708
$
487,498
$
79,540
$
44,258
$
65,110
$
37,176
$
$
5,065
$
13,403
(6,428
)
(1,920
)
(5,065
)
(13,503
)
(38,452
)
(126,263
)
46,800
126,263
100
(3,453
)
2,565
888
(20,494
)
(1,631
)
1,631
20,494
$
$
$
$
33
$
9,174
$
(242
)
$
1,740
$
1,200
$
2,890
$
$
10,940
$
$
2,490
$
$
64
1. | DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
65
66
Other investments. |
67
Revenue and Expense Recognition- |
68
3. | RELATED PARTY TRANSACTIONS |
69
4. | INVESTMENT IN U.S. GOVERNMENT AND AGENCY OBLIGATIONS |
December 31, | |||||||||||||||||
2004 | 2003 | ||||||||||||||||
Cost | Carrying | Cost | Carrying | ||||||||||||||
Basis | Value | Basis | Value | ||||||||||||||
Available for Sale:
|
|||||||||||||||||
Matures in:
|
|||||||||||||||||
less than 1 year
|
$ | 96.8 | $ | 96.8 | $ | 52.8 | $ | 52.6 | |||||||||
2-5 years
|
5.6 | 5.5 | 9.0 | 9.0 | |||||||||||||
$ | 102.4 | $ | 102.3 | $ | 61.8 | $ | 61.6 | ||||||||||
5. | MARKETABLE EQUITY AND DEBT SECURITIES (IN $ MILLIONS) |
December 31, | ||||||||||||||||||
2004 | 2003 | |||||||||||||||||
Cost | Carrying | Cost | Carrying | |||||||||||||||
Basis | Value | Basis | Value | |||||||||||||||
Available for Sale:
|
||||||||||||||||||
Philip Service Corporation(a):
|
||||||||||||||||||
Equity
|
$ | | $ | | $ | | $ | | ||||||||||
Corporate bonds(b)
|
| | 45.1 | 51.6 | ||||||||||||||
Other
|
2.2 | 2.2 | 1.3 | 4.2 | ||||||||||||||
Total
|
$ | 2.2 | $ | 2.2 | $ | 46.4 | $ | 55.8 | ||||||||||
70
6. | DUE FROM BROKERS |
a. $123,001 Due From Brokers Net proceeds from short sales of equity securities and cash collateral held by brokerage institutions against our short sales. | |
b. $90,674 Securities Sold Not Yet Purchased Our obligation to cover the short sales of equity securities described above. The Company recorded unrealized losses on securities sold short of $23.6 million in the year ended December 31, 2004 reflecting an increase in price in the securities sold short. This amount has been recorded in the consolidated statements of earnings for the year then ended |
71
in the respective caption. At March 1, 2005, the $23.6 million of unrealized losses on such securities has been reversed and a net gain of approximately $3.0 million recorded. |
7. | OTHER INVESTMENTS (in $000s) |
Balance at | ||||||||
December 31, | ||||||||
2004 | 2003 | |||||||
Peninsula/ Hampton & Alex Hotel (a) and (b)
|
$ | | $ | 42,030 | ||||
WestPoint Stevens (c)
|
205,850 | | ||||||
Union Power Partners L.P. and Panda Gila River L.P. (d)
|
39,316 | | ||||||
Other
|
782 | 8,298 | ||||||
$ | 245,948 | $ | 50,328 | |||||
72
8. | REAL ESTATE LEASED TO OTHERS ACCOUNTED FOR UNDER THE FINANCING METHOD |
December 31, | ||||||||
2004 | 2003 | |||||||
Minimum lease payments receivable
|
$ | 97,725 | $ | 161,785 | ||||
Unguaranteed residual value
|
48,980 | 74,651 | ||||||
146,705 | 236,436 | |||||||
Less unearned income
|
57,512 | 99,080 | ||||||
89,193 | 137,356 | |||||||
Less current portion of lease amortization
|
3,912 | 5,738 | ||||||
$ | 85,281 | $ | 131,618 | |||||
Year Ending December 31, | Amount | |||
2005
|
$ | 11,941 | ||
2006
|
11,746 | |||
2007
|
10,832 | |||
2008
|
9,476 | |||
2009
|
9,255 | |||
Thereafter
|
44,475 | |||
$ | 97,725 | |||
73
9.
REAL ESTATE LEASED TO OTHERS ACCOUNTED FOR UNDER THE
OPERATING METHOD
December 31,
2004
2003
$
13,666
$
24,040
45,972
83,252
59,638
107,292
10,520
30,849
$
49,118
$
76,443
Year Ending December 31, | Amount | |||
2005
|
$ | 7,186 | ||
2006
|
6,232 | |||
2007
|
5,649 | |||
2008
|
5,383 | |||
2009
|
5,001 | |||
Thereafter
|
19,753 | |||
$ | 49,204 | |||
December 31, | ||||||||
2004 | 2003 | |||||||
Leased to others
|
$ | 74,444 | $ | 146,416 | ||||
Vacant
|
450 | 2,550 | ||||||
74,894 | 148,966 | |||||||
Less accumulated depreciation
|
16,873 | 20,153 | ||||||
$ | 58,021 | $ | 128,813 | |||||
74
December 31,
2004
2003
2002
$
16,355
$
23,785
$
21,993
1,602
3,912
3,679
17,957
27,697
25,672
3,858
7,208
6,737
1,104
5,167
4,521
3,175
3,587
3,722
1,297
3,316
3,185
9,434
19,278
18,165
$
8,523
$
8,419
$
7,507
10. | HOTEL AND CASINO OPERATING PROPERTIES |
75
Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
(in $000s) | |||||||||||||
Hotel and casino operating income:
|
|||||||||||||
Casino
|
$ | 167,972 | $ | 147,888 | $ | 143,057 | |||||||
Hotel
|
54,653 | 47,259 | 44,263 | ||||||||||
Food and beverage
|
66,953 | 59,583 | 56,349 | ||||||||||
Tower, retail, and other income
|
33,778 | 30,336 | 28,247 | ||||||||||
Gross revenues
|
323,356 | 285,066 | 271,916 | ||||||||||
Less promotional allowances
|
(23,375 | ) | (22,255 | ) | (21,893 | ) | |||||||
Net revenues
|
$ | 299,981 | $ | 262,811 | $ | 250,023 | |||||||
Hotel and casino operating expenses:
|
|||||||||||||
Casino
|
$ | 61,985 | $ | 61,284 | $ | 59,879 | |||||||
Hotel
|
24,272 | 22,074 | 20,142 | ||||||||||
Food and beverage
|
48,495 | 44,990 | 43,393 | ||||||||||
Other operating expenses
|
14,131 | 13,524 | 14,505 | ||||||||||
Selling, general, and administrative
|
78,720 | 74,985 | 80,019 | ||||||||||
Total expenses
|
$ | 227,603 | $ | 216,857 | $ | 217,938 | |||||||
76
December 31,
2004
2003
$
47,210
$
47,041
221,314
220,280
108,595
98,586
7,348
7,224
384,467
373,131
95,107
74,428
$
289,360
$
298,703
(in $000s) | ||||
Years ending December 31,
|
||||
2005
|
$ | 5,877 | ||
2006
|
4,778 | |||
2007
|
3,615 | |||
2008
|
2,177 | |||
2009
|
1,224 | |||
Thereafter
|
959 | |||
Total payments
|
$ | 18,630 | ||
11. | HOTEL AND RESORT OPERATING PROPERTIES |
77
12. | INVESTMENT IN DEBT SECURITIES OF AFFILIATES (in $000s): |
December 31, | ||||||||
2004 | 2003 | |||||||
Atlantic Holdings/GB Holdings(a)
|
$ | 60,004 | $ | 24,696 | ||||
TransTexas(b)
|
27,500 | | ||||||
Panaco(c)
|
38,000 | | ||||||
125,504 | 24,696 | |||||||
Less current portion
|
(10,429 | ) | | |||||
$ | 115,075 | $ | 24,696 | |||||
78
13. | EQUITY INTEREST IN GB HOLDINGS, INC. |
79
| $26,914,500 principal amount of the Atlantic Holdings Notes; | |
| $3,620,753 in cash representing accrued interest on the GB Notes and $100 per $1,000 in principal amount of the GB Notes; and | |
| 3,627,711 warrants, which under certain conditions will allow the Company to purchase approximately 998,000 shares of common stock at $.01 per share of Atlantic Holdings representing approximately 10% of the outstanding common stock of Atlantic Holdings, on a fully diluted basis. |
14. | NATIONAL ENERGY GROUP |
80
December 31, | ||||||||
2004 | 2003 | |||||||
Current assets
|
$ | 23,146 | $ | 33,415 | ||||
Noncurrent assets(1)
|
237,127 | 190,389 | ||||||
Total assets
|
$ | 260,273 | $ | 223,804 | ||||
Current liabilities
|
$ | 22,456 | $ | 14,253 | ||||
Noncurrent liabilities
|
63,636 | 48,514 | ||||||
Total liabilities
|
86,092 | 62,767 | ||||||
Members equity
|
174,181 | 161,037 | ||||||
Total liabilities and members equity
|
$ | 260,273 | $ | 223,804 | ||||
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In $000s) | ||||||||||||
Total revenues
|
$ | 78,727 | $ | 77,606 | $ | 35,900 | ||||||
Costs and expenses
|
(47,313 | ) | (46,766 | ) | (32,064 | ) | ||||||
Operating income
|
31,414 | 30,840 | 3,836 | |||||||||
Other income (expense)
|
(2,292 | ) | 30 | 10,090 | ||||||||
Net income
|
$ | 29,122 | $ | 30,870 | $ | 13,926 | ||||||
81
December 31, | ||||||||
2004 | 2003 | |||||||
Investment in Holding LLC at beginning of period
|
$ | 69,346 | $ | 108,880 | ||||
Priority distribution from Holding LLC
|
| (51,446 | ) | |||||
Guaranteed payment from Holding LLC
|
(15,978 | ) | (18,230 | ) | ||||
Accretion of investment in Holding LLC
|
34,432 | 30,142 | ||||||
Investment in Holding LLC at end of period
|
$ | 87,800 | $ | 69,346 | ||||
1. Guaranteed payments are to be paid to NEG, calculated on an annual interest rate of 10.75% on the outstanding priority distribution amount. The priority distribution amount includes all outstanding |
82
debt owed to entities owned or controlled by Carl C. Icahn, including the amount of NEGs 10.75% Senior Notes. As of December 31, 2004, the priority distribution amount was $148.6 million which equals the amount of NEGs 10.75% Senior Notes due the Company. The guaranteed payments will be made on a semi-annual basis. | |
2. The priority distribution amount is to be paid to NEG. Such payment is to occur by November 6, 2006. | |
3. An amount equal to the priority distribution amount and all guaranteed payments paid to NEG, plus any additional capital contributions made by Gascon, less any distribution previously made by NEG to Gascon, is to be paid to Gascon. | |
4. An amount equal to the aggregate annual interest (calculated at prime plus 1 / 2 % on the sum of the guaranteed payments), plus any unpaid interest for prior years (calculated at prime plus 1 / 2 % on the sum of the guaranteed payments), less any distributions previously made by NEG to Gascon, is to be paid to Gascon. | |
5. After the above distributions have been made, any additional distributions will be made in accordance with the ratio of NEGs and Gascons respective capital accounts. |
15. | SIGNIFICANT PROPERTY TRANSACTIONS |
a. In September 2002, the Company purchased an industrial building located in Nashville, Tennessee for approximately $18.2 million. The building was constructed in 2001 and is fully leased to two tenants, Alliance Healthcare and Jet Equipment & Tools Inc., with leases expiring in 2011. The annual net operating income was anticipated to be approximately $1.6 million increasing to approximately $1.9 million by 2011. In October 2002, the Company closed a $12.7 million non-recourse mortgage loan on the Nashville, Tennessee property. The loan bore interest at 6.4% per annum and was due to mature in ten years. Required payments were interest only for the first three years and then principal amortization would commence based on a thirty-year amortization schedule. In June 2004, the Company sold the property for a selling price of $19.2 million. A gain of approximately $1.4 million was recognized in the year ended December 31, 2004 and is included in discontinued operations in the Consolidated Statements of Earnings. | |
At December 31, 2003, the property had a carrying value of approximately $18,066,000 and was encumbered by a non-recourse mortgage in the amount of $12,700,000. | |
b. In October 2002, the Company sold a property located in North Palm Beach, Florida for a selling price of $3.5 million. A gain of approximately $2.4 million was recognized in the year ended December 31, 2002. |
83
c. In October 2003, the Company sold a property located in Columbia, Maryland to its tenant for a selling price of $11 million. A gain of approximately $5.8 million was recognized in the year ended December 31, 2003. | |
d. In the year ended December 31, 2004, the Company sold 57 rental real estate properties for approximately $245 million which were encumbered by mortgage debt of approximately $94 million which was repaid from the sale proceeds. | |
In the year ended December 31, 2004, of the 57 properties, the Company sold nine financing lease properties for approximately $43.6 million. The properties were encumbered by mortgage debt of approximately $26.8 million which was repaid from the sales proceeds. The carrying value of these properties was approximately $38.3 million; therefore, the Company recognized a gain on sale of approximately $5.3 million in the year ended December 31, 2004, which is included in income from continuing operations in the Consolidated Statements of Earnings. | |
In the year ended December 31, 2004, of the 57 properties, the Company sold 48 operating and held for sale properties for approximately $201.8 million. The properties were encumbered by mortgage debt of approximately $67 million which was repaid from the sales proceeds. The carrying value of these properties was approximately $126.6 million. The Company recognized a gain on sale of approximately $75.2 million in year ended December 31, 2004, which is included in income from discontinued operations in the Consolidated Statements of Earnings. | |
At December 31, 2004, the Company had fifteen properties under contract or as to which letters of intent had been executed by potential purchasers, all of which contracts or letters of intent are subject to purchasers due diligence and other closing conditions. Selling prices for the properties covered by the contracts or letters of intent would total approximately $97.9 million. These properties are encumbered by mortgage debt of approximately $36.0 million. At December 31, 2004, the carrying value of these properties is approximately $62.3 million. As of March 1, 2005, the Company has sold four of the fifteen properties for $46.5 million. The properties had a carrying value of $29.9 million. A gain of $16.6 million will be recorded in the three months ended March 31, 2005. In accordance with generally accepted accounting principles, only the real estate operating properties under contract or letter of intent, but not the financing lease properties, were reclassified to Properties Held for Sale and the related income and expense reclassified to Income from discontinued operations. | |
e. In January 2004, in conjunction with its reinvestment program, the Company purchased a 34,422 square foot commercial condominium unit (North Moore Condos) located in New York City for approximately $14.5 million. The unit contains a Citibank branch, a furniture store and a restaurant. Current annual rent income from the three tenants is approximately $1,289,000. The Company obtained mortgage financing of $10 million for this property in April 2004. The mortgage bears interest at the rate of 5.73% per annum, and matures in March 2014. Annual debt service is $698,760. | |
f. In July 2004, the Company purchased two Vero Beach, Florida waterfront communities, Grand Harbor and Oak Harbor (Grand Harbor), including their respective golf courses, tennis complex, fitness center, beach club and clubhouses. The acquisition also included properties in various stages of development, including land for future residential development, improved lots and finished residential units ready for sale. The purchase price was approximately $75 million, which included approximately $62 million of land and construction in progress. The Company plans to invest in the further development of these properties and the enhancement of the existing infrastructure. |
84
85
86
87
88
89
90
91
92
93
94
95
96
97
16.
MORTGAGES PAYABLE
Balance at December 31,
Annual Principal and
Range of Interest Rates
Range of Maturities
Interest Payment
2004
2003
10/15/0710/01/14
$
10,811
$
91,896
$
180,989
Less current portion and mortgages on properties held for sale
(31,177
)
(87,753
)
$
60,719
$
93,236
Year Ending December 31,
Amount
$
4,759
5,116
11,428
24,385
7,211
38,997
$
91,896
a. See Note 15a. for Mid-South Logistics financing in
October 2002.
b. On May 16, 2003, the Company executed a mortgage
note secured by a distribution facility located in Windsor
Locks, Connecticut and obtained funding in the principal amount
of $20 million. The loan bears interest at 5.63% per
annum and matures on June 1, 2013. Annual debt service is
approximately $1,382,000 based on a 30 year amortization
schedule.
c. See Note 15e. for North Moore Condo financing in
April 2004.
17.
SENIOR NOTES AND CREDIT FACILITIES DUE AFFILIATES
Table of Contents
18.
SENIOR SECURED NOTES PAYABLE AND CREDIT FACILITY
Table of Contents
19.
SENIOR UNSECURED NOTES PAYABLE
20.
ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT
LIABILITIES
December 31,
2004
2003
$
11,463
$
11,951
11,113
12,507
16,242
42,975
21,316
$
81,793
$
45,774
21.
EARNINGS PER LIMITED PARTNERSHIP UNIT
Table of Contents
Net Income Per Unit
December 31,
2004
2003
2002
In $000s (except per unit data)
$
70,453
$
47,822
$
55,810
4,981
4,792
4,518
75,434
52,614
60,328
82,054
11,538
7,358
$
157,488
$
64,152
$
67,686
46,098,284
46,098,284
46,098,284
5,444,028
8,391,659
10,368,414
51,542,312
54,489,943
56,466,698
$
1.53
$
.99
$
1.11
1.78
.25
.16
$
3.31
$
1.24
$
1.27
$
1.46
$
.92
$
.99
1.59
.21
.13
$
3.05
$
1.13
$
1.12
22.
PREFERRED UNITS
Table of Contents
23.
INCOME TAXES (in $000s)
December 31,
2004
2003
$
1,319,566
$
1,149,418
120,820
79,238
$
1,440,386
$
1,228,656
Table of Contents
(i) The Companys corporate subsidiaries recorded the
following income tax (expense) benefit attributable to
continuing operations for American Casino and NEG for the years
ended December 31, 2004, 2003 and 2002 (in $000s):
December 31,
2004
2003
2002
$
(2,626
)
$
(4,302
)
$
(311
)
(14,137
)
5,875
(9,785
)
$
(16,763
)
$
1,573
$
(10,096
)
(ii) The tax effect of significant differences representing
net deferred tax assets (the difference between financial
statement carrying values and the tax basis of assets and
liabilities) for the Company is as follows at December 31,
2004 and 2003 (in $000s):
December 31,
2004
2003
$
39,209
$
39,858
32,176
30,942
5,333
18,845
5,954
5,962
82,672
95,607
(14,588
)
(17,733
)
68,084
77,874
(2,685
)
(2,982
)
$
65,399
$
74,892
(iii) The provision (benefit) for income taxes differs from
the amount computed at the federal statutory rate as a result of
the following:
Year Ended December 31,
2004
2003
2002
35.0
%
35.0
%
35.0
%
0.0
%
5.0
%
0.0
%
(25.6
)%
(14.3
)%
(22.3
)%
(1.7
)%
(28.3
)%
(0.5
)%
1.1
%
0.3
%
0.3
%
8.8
%
(2.3
)%
12.5
%
Table of Contents
24.
COMMITMENTS AND CONTINGENCIES
Table of Contents
25.
EMPLOYEE BENEFIT PLANS
26.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Table of Contents
Other Investments
At December 31, 2004
At December 31, 2003
Net
Estimated
Net
Estimated
Investment
Fair Value
Investment
Fair Value
$
245,948
$
248,900
$
50,328
$
55,000
Mortgages Payable
At December 31, 2004
At December 31, 2003
Carrying
Estimated
Carrying
Estimated
Value
Fair Value
Value
Fair Value
$
91,896
$
93,900
$
180,989
$
185,000
Limitations
27.
SEGMENT REPORTING
Table of Contents
December 31,
2004
2003
2002
$
297,868
$
259,345
$
250,328
26,591
13,265
76,024
17,099
19,514
20,654
18,477
14,592
14,918
45,995
38,109
40,516
34,241
13,874
15,283
440,271
358,699
417,723
13,310
11,770
(1)
18,006
(1)
$
453,581
$
370,469
$
435,729
$
70,265
$
42,488
$
32,390
6,355
4,136
21,384
34,849
30,879
33,411
12,811
14,330
13,893
1,843
3,454
2,365
34,241
13,874
15,283
160,364
109,161
118,726
13,310
11,770
18,006
(46,099
)
(21,103
)
(27,297
)
(9,806
)
(6,851
)
(7,029
)
(29,955
)
(24,764
)
(23,589
)
87,814
68,213
78,817
5,262
7,121
8,990
(1,503
)
(353
)
(3,750
)
(19,759
)
(8,476
)
40,159
2,607
(23,619
)
(15,600
)
(1,943
)
(16,763
)
1,573
(10,096
)
83,720
11,772
7,507
(8,466
)
(10,664
)
(7,528
)
$
152,507
$
59,360
$
63,168
(1)
Primarily interest income on U.S. Government and Agency
obligations and other short-term investments and Icahn note
receivable.
Table of Contents
December 31,
2004
2003
2002
$
196,332
$
340,062
$
359,700
289,360
298,703
290,775
106,537
43,459
40,415
50,132
41,526
44,346
472,103
231,050
479,104
1,114,464
954,800
1,214,340
1,148,593
691,806
491,691
$
2,263,057
$
1,646,606
$
1,706,031
$
14,583
$
$
18,226
61,845
125,900
16,463
$
218,791
$
$
18,226
$
18
$
413
$
181
17,947
1,138
13,589
31,844
19,133
2,614
1,067
2,582
$
34,168
$
33,324
$
23,034
28.
REPURCHASE OF DEPOSITARY UNITS
29.
SUBSEQUENT EVENTS
Table of Contents
Table of Contents
Three Months Ended(1)
March 31,
June 30,
September 30,
December 31,
2004
2003
2004
2003
2004
2003
2004
2003
$
104,122
$
92,859
$
117,901
$
89,825
$
119,485
$
94,665
$
112,073
$
93,120
$
24,898
$
16,008
$
25,834
$
15,425
$
23,998
$
16,624
$
13,084
$
20,156
6,047
1,138
(226
)
(272
)
(10
)
501
(549
)
5,754
(311
)
(1,192
)
28,857
8,310
2,168
2,992
439
(23,619
)
(15,600
)
(961
)
(18,798
)
59,802
16,185
33,918
(3,645
)
23,988
18,982
(23,692
)
25,157
(6,169
)
(3,892
)
(3,088
)
(3,167
)
(3,637
)
(3,577
)
(3,869
)
12,209
53,633
12,293
30,830
(6,812
)
20,351
15,405
(27,561
)
37,366
9,387
2,099
50,956
4,025
10,672
3,548
12,705
2,100
$
63,020
$
14,392
$
81,786
$
(2,787
)
$
31,023
$
18,953
$
(14,856
)
$
39,466
$
1.14
$
.15
$
.63
$
(.22
)
$
.43
$
.25
$
(.59
)
$
.80
.20
.05
1.08
.09
.23
.07
.27
.05
$
1.34
$
.20
$
1.71
$
(.13
)
$
.66
$
.32
$
(.32
)
$
.85
$
1.02
$
.15
$
.58
$
(.22
)
$
.41
$
.23
$
(.59
)
$
.71
.18
.03
.96
.09
.20
.06
.27
.04
$
1.20
$
.18
$
1.54
$
(.13
)
$
.61
$
.29
$
(.32
)
$
.75
(1)
All quarterly amounts have been reclassified for the effects of
reporting discontinued operations.
(2)
Net earnings (loss) per unit is computed separately for each
period and, therefore, the sum of such quarterly per unit
amounts may differ from the total for the year.
Table of Contents
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item 9A. | Controls and Procedures. |
98
99
Item 9B. | Other Information. |
100
Item 10. | Directors and Executive Officers of the Registrant. |
Name | Age | Position | ||||
Carl C. Icahn
|
69 | Chairman of the Board | ||||
William A. Leidesdorf
|
59 | Director | ||||
James L. Nelson
|
55 | Director | ||||
Jack G. Wasserman
|
68 | Director | ||||
Keith A. Meister
|
31 | President and Chief Executive Officer | ||||
Martin L. Hirsch
|
49 | Executive Vice President and Director of Acquisitions and Development | ||||
John P. Saldarelli
|
63 | Vice President, Chief Financial Officer, Secretary and Treasurer |
Name | Age | Position | ||||
Bob Alexander
|
72 | President and Chief Executive Officer, National Energy Group, Inc. | ||||
Richard P. Brown
|
57 | President, Chief Executive Officer and Director, American Casino & Entertainment Properties LLC |
101
102
103
104
Item 11. | Executive Compensation.(1) |
Annual Compensation | |||||||||||||||||
All Other | |||||||||||||||||
(a) | Salary | Bonus | Compensation | ||||||||||||||
Name and Principal Position | Year | ($) | ($) | ($)(3) | |||||||||||||
Keith A. Meister(2)
|
2004 | 227,308 | | | |||||||||||||
President and Chief Executive Officer | 2003 | 73,150 | | | |||||||||||||
2002 | | | | ||||||||||||||
Martin L. Hirsch(2)(3)
|
2004 | 295,000 | 200,000 | 4,000 | |||||||||||||
Executive Vice President and Director of Acquisitions and Development | 2003 | 269,923 | 50,000 | 4,000 | |||||||||||||
2002 | 231,000 | 24,500 | 3,667 | ||||||||||||||
John P. Saldarelli(2)(3)
|
2004 | 191,100 | 22,932 | 3,819 | |||||||||||||
Vice President, Chief Financial Officer, Secretary and | 2003 | 182,200 | 18,200 | 4,000 | |||||||||||||
Treasurer | 2002 | 182,000 | 8,400 | 3,666 | |||||||||||||
Richard P. Brown
|
2004 | 461,155 | 250,000 | 8,335 | |||||||||||||
President and Chief Executive Officer, | 2003 | 316,154 | 20,000 | 8,315 | |||||||||||||
American Casino & Entertainment Properties LLC | 2002 | 274,988 | 20,000 | 6,459 | |||||||||||||
Bob Alexander
|
2004 | 300,000 | 175,000 | | |||||||||||||
President and Chief Executive Officer, National Energy | 2003 | 300,000 | 150,000 | | |||||||||||||
Group, Inc. | 2002 | 300,000 | | |
(1) | Pursuant to applicable regulations, certain columns of the Summary Compensation Table and each of the remaining tables have been omitted, as there has been no compensation awarded to, earned by or paid to any of the named executive officers by us, or by API, which was subsequently reimbursed by us, required to be reported in those columns or tables, excepted as noted below. |
(2) | On August 18, 2003, Keith A. Meister was elected President and Chief Executive Officer. Mr. Meister devotes approximately 50% of his time to the performance of services for AREP and its subsidiaries. Messrs. Saldarelli and Hirsch devote all of their time to the performance of services for AREP and its subsidiaries. |
(3) | Represent matching contributions under AREPs 401(k) plan. In 2004, AREP made matching contributions to the employees individual plan account in the amount of one-third ( 1 / 3 ) of the first six (6%) percent of gross salary contributed by the employee. |
105
Item 12. | Security Ownership of Certain Beneficial Owners and Management. |
106
Beneficial | Beneficial | |||||||||||||||
Ownership of | Percent | Ownership of | Percent | |||||||||||||
Name of Beneficial Owner | Depositary Units | of Class | Preferred Units | of Class | ||||||||||||
Carl C. Icahn(1)
|
39,896,836 | (2) | 86.5% | 8,900,995 | 86.5% | (2) | ||||||||||
All directors and executive officers, as a group
(seven persons)
|
39,896,836 | (2) | 86.5% | 8,900,995 | 86.5% | (2) |
(1) | Carl C. Icahn, through affiliates, is the beneficial owner of the 39,896,836 depositary units set forth above and may also be deemed to be the beneficial owner of the 700 depositary units owned of record by API Nominee Corp., which in accordance with state law are in the process of being turned over to the relevant state authorities as unclaimed property; however, Mr. Icahn disclaims such beneficial ownership. The foregoing is exclusive of a 1.99% ownership interest which API holds by virtue of its 1% general partner interest in each of us and AREH. Furthermore, pursuant to a registration rights agreement entered into by affiliates of Mr. Icahn we have agreed to pay any expenses incurred in connection with two demand and unlimited piggy-back registrations requested by affiliates of Mr. Icahn. |
(2) | Does not include up to 16,275,863 depositary units that may be issued upon the closing of the pending acquisitions described in Item 1 Business Pending Acquisitions. If all such units were issued, then Mr. Icahn would be the beneficial owner of the outstanding 46,172,699 depositary units, representing approximately 90.1% of the depositary units. |
107
Item 13. | Certain Relationships and Related Transactions. |
Preferred and Depositary Units |
Oil and Gas |
108
Purchase Agreements |
109
Hotel and Casino Operations |
110
Partnership Provisions Concerning Property Management |
| Property Management and Asset Management Services. To the extent that we acquire any properties requiring active management (e.g., operating properties that are not net-leased) or asset management services, including on site services, we may enter into management or other arrangements with API or its affiliates. Generally, it is contemplated that under property management arrangements, the entity managing the property would receive a property management fee (generally 3% to 6% of gross rentals for direct management, depending upon the location) and under asset management arrangements, the entity managing the asset would receive an asset management fee (generally .5% to 1% of the appraised value of the asset for asset management services, depending upon the location) in payment for its services and reimbursement for costs incurred. | |
| Brokerage and Leasing Commissions. We also may pay affiliates of API real estate brokerage and leasing commissions (which generally may range from 2% to 6% of the purchase price or rentals depending on location; this range may be somewhat higher for problem properties or lesser-valued properties). | |
| Lending Arrangements. API or its affiliates may lend money to, or arrange loans for, us. Fees payable to API or its affiliates in connection with such activities include mortgage brokerage fees (generally .5% to 3% of the loan amount), mortgage origination fees (generally .5% to 1.5% of the loan amount) and loan servicing fees (generally .10% to .12% of the loan amount), as well as interest on any amounts loaned by API or its affiliates to us. | |
| Development and Construction Services. API or its affiliates may also receive fees for development services, generally 1% to 4% of development costs, and general contracting services or construction management services, generally 4% to 6% of construction costs. |
111
Item 14. | Principal Accounting Fees and Services. |
Audit fees(1)
|
$ | 1,010,100 | ||
Audit related fees(2)
|
333,015 | |||
Total fees
|
$ | 1,343,115 | ||
2003 | |||||
Audit fees(3)
|
$ | 735,200 | |||
Audit related fees(4)
|
634,300 | ||||
Tax fees(5)
|
180,400 | ||||
Total fees
|
$ | 1,549,900 | |||
(1) | Services related to audit of annual consolidated financial statements and internal controls, review of quarterly financial statements, review of reports filed with the SEC and other services. |
(2) | Services related to limited reviews, consents, assistance with review of offering documents and registration statement filed with the SEC. |
(3) | Services relating to audit of the 2003 consolidated financial statements, review of quarterly financial statements and limited reviews, consents, assistance with the review of documents filed with the SEC and other services. |
(4) | Services relating primarily to 2003 audits of GB Holdings financial statements, employee benefit plans, regulatory compliance procedures and other services to us and our consolidated subsidiaries. |
(5) | Services relating to review and preparation of federal and state tax returns. |
112
Item 15. | Exhibits, Financial Statement Schedules. |
Page | ||||
Number | ||||
Report of Independent Registered Public Accounting Firm
|
58 | |||
Report of Independent Registered Public Accounting Firm
|
59 | |||
Consolidated Balance Sheets December 31, 2004
and 2003
|
60 | |||
Consolidated Statements of Earnings Years ended
December 31, 2004, 2003 and 2002
|
61 | |||
Consolidated Statements of Changes in Partners Equity and
Comprehensive Income Years ended
December 31, 2004, 2003 and 2002
|
62 | |||
Consolidated Statements of Cash Flows Years ended
December 31, 2004, 2003 and 2002
|
63 | |||
Notes to Consolidated Financial Statements
|
65 |
Schedule III Real Estate Owned and Revenues Earned
(by tenant or guarantor, as applicable)
|
118 |
Exhibit | ||||
Index | ||||
3 | .1 | Certificate of Limited Partnership of American Real Estate Partners, L.P. (AREP) dated February 17, 1987 (incorporated by reference to Exhibit No. 3.1 to AREPs Form 10-Q for the quarter ended March 31, 2004 (SEC File No. 1-9516), filed on May 10, 2004). | ||
3 | .2 | Amended and Restated Agreement of Limited Partnership of AREP, dated as of May 12, 1987 (incorporated by reference to Exhibit No. 3.2 to AREPs Form 10-Q for the quarter ended March 31, 2004 (SEC File No. 1-9516), filed on May 10, 2004). | ||
3 | .3 | Amendment No. 1 to the Amended and Restated Agreement of Limited Partnership of AREP, dated February 22, 1995 (incorporated by reference to Exhibit 3.3 to AREPs Form 10-K for the year ended December 31, 1994 (SEC File No. 1-9516), filed on March 31, 1995). | ||
3 | .4 | Certificate of Limited Partnership of American Real Estate Holdings Limited Partnership (AREH), dated February 17, 1987, as amended pursuant to First Amendment thereto, dated March 10, 1987 (incorporated by reference to Exhibit 3.5 to AREPs Form 10-Q for the quarter ended March 31, 2004 (SEC File No. 1-9516), filed on May 10, 2004). |
113
Exhibit
Index
3
.5
Amended and Restated Agreement of Limited Partnership of AREH,
dated as of July 1, 1987 (incorporated by reference to
Exhibit 3.5 to AREPs Form 10-Q for the quarter ended
March 31, 2004 (SEC File No. 1-9516), filed on
May 10, 2004).
3
.6
Amendment No. 2 to the Amended and Restated Agreement of
Limited Partnership of AREP, dated as of August 16, 1996
(incorporated by reference to Exhibit 10.1 to AREPs
Form 8-K (SEC File No. 1-9516), filed on August 16,
1996).
3
.7
Amendment No. 1 to the Amended and Restated Agreement of
Limited Partnership of AREH, dated August 16, 1996
(incorporated by reference to Exhibit 10.2 to AREPs Form
8-K (SEC File No. 1-9516), filed on August 16, 1996).
3
.8
Amendment No. 3 to the Amended and Restated Agreement of
Limited Partnership of AREP, dated May 9, 2002
(incorporated by reference to Exhibit 3.8 to AREPs
Form 10-K for the year ended December 31, 2002 (SEC File
No. 1-9516), filed on March 31, 2003).
3
.9
Amendment No. 2 to the Amended and Restated Agreement of
Limited Partnership of AREH, dated June 14, 2002
(incorporated by reference to Exhibit 3.9 to AREPs
Form 10-K for the year ended December 31, 2002 (SEC File
No. 1-9516), filed on March 31, 2003).
4
.1
Depositary Agreement among AREP, American Property Investors,
Inc. and Registrar and Transfer Company, dated as of
July 1, 1987 (incorporated by reference to Exhibit 4.1
to AREPs Form 10-Q for the quarter ended March 31,
2004 (SEC File No. 1-9516), filed on May 10, 2004).
4
.2
Amendment No. 1 to the Depositary Agreement dated as of
February 22, 1995 (incorporated by reference to
Exhibit 4.2 to AREPs Form 10-K for the year ended
December 31, 1994 (SEC File No. 1-9516), filed on
March 31, 1995).
4
.3
Specimen Certificate representing Depositary Units.
4
.4
Form of Application for Transfer of Depositary Units.
4
.5
Specimen Certificate representing Preferred Units (incorporated
by reference to Exhibit No. 4.9 to AREPs
Form S-3 (SEC File No. 33-54767), filed on
February 22, 1995).
4
.6
Indenture, dated as of January 29, 2004, among American
Casino & Entertainment Properties LLC (ACEP),
American Casino & Entertainment Properties Finance Corp.,
(ACEP Finance), the guarantors from time to time
party thereto and Wilmington Trust Company, as Trustee (the
Trustee), incorporated by reference to Exhibit 4.1
to ACEPs Form S-4 (SEC File No. 333-118149), filed on
August 12, 2004).
4
.7
Form of ACEP and ACEP Finance 7.85% Note (incorporated by
reference to Exhibit 4.10 to AREPs Form 10-Q for the
quarter ended June 30, 2004 (SEC File No. 1-9516),
filed on August 9, 2004).
4
.8
Registration Rights Agreement, dated as of January 29,
2004, among ACEP, ACEP Finance, the guarantors party thereto and
Bear, Stearns & Co. Inc. (incorporated by reference to
Exhibit 4.4 to ACEPs Form S-4 (SEC File
No. 333-118149), filed on August 12, 2004).
4
.9
Indenture, dated as of May 12, 2004, among AREP, American
Real Estate Finance Corp. (AREP Finance), AREH and
Wilmington Trust Company, as Trustee, (incorporated by reference
to Exhibit 4.1 to AREPs Form S-4 (SEC File
No. 333-118021), filed on August 6, 2004).
4
.10
Form of AREP and AREP Finance
8
1
/
8
% Note
(incorporated by reference to Exhibit 4.2 to AREPs
Form S-4 (SEC File No. 333-118021), filed on August 6,
2004).
4
.11
Registration Rights Agreement, dated as of May 12, 2004,
among AREP, AREP Finance, AREH and Bear, Stearns & Co.
Inc. (incorporated by reference to Exhibit 4.3 to
AREPs Form S-4 (SEC File No. 333-118021), filed on
August 6, 2004).
4
.12
Indenture, dated as of February 7, 2005, among AREP, AREP
Finance and AREH, as Guarantors, and Wilmington Trust Company,
as Trustee (incorporated by reference to Exhibit 4.9 to
AREPs Form 8-K (SEC File No. 1-9516), filed on
February 10, 2005).
114
Exhibit
Index
4
.13
Form of AREP and AREP
Finance 7
1
/
8
%
Senior Note (incorporated by reference to Exhibit 4.10 to
AREPs Form 8-K (SEC File No. 1-09516), filed on
February 10, 2005).
4
.14
Registration Rights Agreement, dated as of February 7,
2005, among AREP, AREP Finance and AREH, and Bear, Stearns &
Co. Inc. and Jefferies & Company, Inc. (incorporated by
reference to Exhibit 4.11 to AREPs Form 8-K (SEC File No.
1-9516), filed on February 10, 2005).
10
.1
Distribution Reinvestment Plan
10
.2
Registration Rights Agreement between AREP and X LP (now
known as High Coast Limited Partnership)
10
.3
Amended and Restated Agency Agreement (incorporated by reference
to Exhibit 10.12 to Form 10-K for the year ended
December 31, 1994 (SEC File No. 1-9516), filed on
March 31, 1995).
10
.4
Service Mark License Agreement, by and between Becker Gaming,
Inc. and Arizona Charlies, Inc., dated as of
August 1, 2000 (incorporated by reference to ACEPs
Form 10-K (SEC File No. 333-118149), filed on
March 16, 2005.
10
.5
Management Agreement, dated September 12, 2001, by and
between National Energy Group, Inc. (NEG) and NEG
Operating LLC (incorporated by reference to Exhibit 99.4 to
NEGs Form 8-K (SEC File No. 000-19136), filed on
September 27, 2001).
10
.6
Pledge Agreement and Irrevocable Proxy, dated December 29,
2003, made by NEG in favor of Bank of Texas, N.A. (incorporated
by reference to Exhibit 10.3 of NEGs Form 8-K (SEC
File No. 000-19036), filed on January 14, 2004).
10
.7
Credit Agreement, dated as of January 29, 2004, by and
among ACEP, certain subsidiaries of ACEP, the several lenders
from time to time parties thereto and Bear Stearns Corporate
Lending Inc., as Syndication Agent and Administrative Agent
(incorporated by reference to Exhibit 10.1 to ACEPs Form
S-4 (SEC File No. 333-118149), filed on August 12,
2004).
10
.8
Pledge and Security Agreement, dated as of May 26, 2004, by
and among ACEP, ACEP Finance, certain subsidiaries of ACEP and
Bear Stearns Corporate Lending Inc. (incorporated by reference
to Exhibit 10.2 to ACEPs Form S-4 (SEC File No.
333-118149), filed on August 12, 2004).
10
.9
Employment Agreement, effective as of April 1, 2004, by and
between ACEP and Richard P. Brown (incorporated by reference to
Exhibit 10.4 to ACEPs Form S-4 (SEC File
No. 333-118149), filed on August 12, 2004).
10
.10
First Amendment to Credit Agreement, dated as of
January 29, 2004 by and among ACEP, as the Borrower,
certain subsidiaries of the Borrower, as Guarantors, The Several
Lenders, Bear Stearns Corporate Lending Inc. as Syndication
Agent, and Bear Stearns Corporate Lending Inc., as
Administrative Agent, dated as of May 26, 2004, Bear,
Stearns & Co. Inc., as Sole Lead Arranger and Sole
Bookrunner (incorporated by reference to Exhibit 10.6 to
ACEPs Form S-4 (SEC File No. 333-118149), filed
on October 12, 2004).
10
.11
Management Agreement, dated November 16, 2004, by and
between NEG and Panaco, Inc. (Panaco) (incorporated
by reference to Exhibit 10.13 to NEGs Form 10-Q (SEC File
No. 000-19136), filed on November 15, 2004).
10
.12
Management Agreement, dated August 28, 2003, by and between
NEG and TransTexas Gas Corporation (TransTexas)
(incorporated by reference to Exhibit 10.1 to NEGs
Form 8-K (SEC File No. 000-19136), filed on September 10,
2003).
10
.13
Purchase Agreement for Notes Issued by TransTexas, dated
December 6, 2004, by and between Thornwood Associates LP
(Thornwood) and AREP Oil & Gas LLC
(AREP Oil & Gas)(incorporated by reference to
Exhibit 99.1 to AREPs Form 8-K (SEC File
No. 1-9516), filed on December 10, 2004).
115
Exhibit
Index
10
.14
Assignment and Assumption Agreement, dated December 6,
2004, by and between Thornwood and AREP Oil & Gas
(incorporated by reference to Exhibit 99.2 to AREPs
Form 8-K (SEC File No. 1-9516), filed on December 10,
2004).
10
.15
Membership Interest Purchase Agreement, dated as of
December 6, 2004, by and among AREP Oil & Gas,
Arnos Corp., High River and Hopper Investments LLC (incorporated
by reference to Exhibit 99.3 to AREPs Form 8-K (SEC
File No. 1-9516), filed on December 10, 2004).
10
.16
Assignment and Assumption Agreement, dated December 6,
2004, by and among AREP Oil & Gas, Arnos Corp., High
River and Hopper Investments LLC (incorporated by reference to
Exhibit 99.4 to AREPs Form 8-K (SEC File
No. 1-9516), filed on December 10, 2004).
10
.17
Amended and Restated Oil & Gas Term Loan Agreement by
and among TransTexas, Galveston Bay Pipeline Company, Galveston
Bay Processing Corporation and Thornwood, dated August 28,
2003 (incorporated by reference to Exhibit 99.5 to
AREPs Form 8-K (SEC File No. 1-9516), filed on
December 10, 2004).
10
.18
Amended and Restated Security and Pledge Agreement, dated August
2003, by and among TransTexas, Galveston Bay Pipeline Company,
Galveston Bay Processing Corporation and Thornwood (incorporated
by reference to Exhibit 99.6 to AREPs Form 8-K (SEC
File No. 1-9516), filed on December 10, 2004).
10
.19
Term Loan and Security Agreement among Panaco, Mid River LLC and
Lenders Named Therein, dated as of November 16, 2004
(incorporated by reference to Exhibit 99.7 to AREPs
Form 8-K (SEC File No. 1-9516), filed on December 10,
2004).
10
.20
Note Purchase Agreement, dated as of December 27, 2004, by
and among AREP Sands Holding LLC, Barberry Corp., and Cyprus,
LLC (incorporated by reference to Exhibit 99.1 to
AREPs Form 8-K (SEC File No. 1-9516), filed on
December 30, 2004).
12
Statements re computation of ratios.
14
.1
Code of Business Conduct and Ethics incorporated by reference to
Exhibit 99.2 to AREPs Form 10-Q for the quarter ended
September 30, 2004 (SEC File No. 1-9516), filed on
November 9, 2004).
21
List of Subsidiaries.
31
.1
Certification of Principal Executive Officer pursuant to
Section 302(a) of the Sarbanes-Oxley Act of 2002.
31
.2
Certification of Principal Financial Officer pursuant to
Section 302(a) of the Sarbanes-Oxley Act of 2002.
32
.1
Certification of Principal Executive Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
32
.2
Certification of Principal Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
99
.1
Corporate Governance Guidelines (incorporated by reference to
Exhibit 99.1 to AREPs Form 10-Q for the quarter ended
September 30, 2004 (SEC File No. 1-9516), filed on
November 9, 2004).
116
117
118
119
120
121
122
123
124
125
126
127
American Real Estate
Partners, L.P.
By:
American Property
Investors, Inc.
General
Partner
By:
/s/
Keith A. Meister
Keith A. Meister,
President and Chief Executive Officer
Signature
Title
Date
/s/
Keith A. Meister
President and Chief Executive Officer
March 16, 2005
/s/
John P. Saldarelli
Vice President, Chief Financial Officer, Secretary and Treasurer
(Principal Financial Officer and Principal Accounting Officer)
March 16, 2005
/s/
Carl C. Icahn
Chairman of the Board
March 16, 2005
/s/
William A.
Leidesdorf
Director
March 16, 2005
/s/
James L. Nelson
Director
March 16, 2005
/s/
Jack G. Wasserman
Director
March 16, 2005
Table of Contents
Part 2 Revenues earned for the Year Ended
Part 1 Real Estate Owned at December 31, 2004 Accounted for Under the:
December 31, 2004
Operating Method
Financing Method
Rent due and
Accrued or
Expended for
Amount
Received in
Minimum Lease
Total
Interest,
Carried at
Advance at
Payments Due
Revenue
Depreciation,
Net Income
No. of
Amount of
Initial Cost
Cost of
Close of
Reserve for
End of
Net
and Accrued at
Applicable
Taxes, and
Applicable
State
Locations
Encumbrances
to Company
Improvements
Period
Depreciation
Period
Investment
End of Period
to Period
Other Expenses
to Period
PA
1
$
329,559
(3)
$
13,739
(3)
$
315,820
AL
5
44,889
(13,675
)
58,564
NJ
1
45,454
(3)
8,518
(3)
36,936
VA
1
2,002,409
(3)
1,682,710
(3)
319,699
VA
1
$
3,376,815
$
(350,000
)
$
3,026,815
$
257,538
114,217
487,522
(373,305
)
CT
1
54,839
(3)
(9,000
)(3)
63,839
OR
3
10,379
(3)
1,300
(3)
9,079
CA
1
5,637
(3)
0
(3)
5,637
MO
1
23,369
(3)
0
(3)
23,369
MA
1
3,744,706
37,571
3,782,277
308,037
143,148
718,750
(575,602
)
NC
1
3,464,225
3,464,225
458,819
797,177
114,705
682,472
NC
1
1,046,012
1,046,012
(2)
66,634
396,250
8,244
388,006
NY
1
158,491
(3)
175,603
(3)
(17,112
)
MN
1
600,675
(3)
(215,173
)(3)
815,848
CT
1
$
19,576,538
$
18,937,655
1,779,799
1,148,329
631,470
IL
1
56,086
(3)
0
(3)
56,086
NJ
1
441,288
(3)
7,747
(3)
433,541
WV
1
1,919,486
1,919,486
13,375
211,197
13,375
197,822
OH
1
314,012
314,012
28,019
34,489
10,090
24,399
IL
1
364,321
(3)
(9,173
)(3)
373,494
NY
1
874,765
874,765
104,090
$
45
108,000
20,818
87,182
VA
1
13,828
(3)
1,805
(3)
12,023
NY
1
7,934,020
7,934,020
(2)
226,925
12,050
813,152
(801,102
)
IN
1
0
(3)
66,930
(3)
(66,930
)
MN
1
339,358
339,358
172,501
(3,083
)
37,000
2,562
34,438
IL
1
37,168
(3)
8,550
(3)
28,618
AL
2
127,984
(3)
2,646
(3)
125,338
IN
1
45,272
(3)
204
(3)
45,068
OH
1
39,770
(3)
0
(3)
39,770
MO
1
414,887
414,887
17,105
91,818
10,376
81,442
TX
1
438,097
(2,616
)
435,481
(2)
16,744
103,960
0
103,960
MI
1
62,475
(3)
204
(3)
62,271
KY
1
560,444
560,444
523,715
97,802
5,453
92,349
MA
1
2,484,262
2,484,262
1,987,410
(41,707
)
250,244
3,850
246,394
FL
1
910,425
910,425
42,803
(279
)
117,000
39,061
77,939
LA
1
0
31,394
(31,394
)
WI
1
0
(3)
65,866
(3)
(65,866
)
MN
1
0
(3)
85,348
(3)
(85,348
)
IA
1
973,484
93,963
26,423
67,540
FL
1
2,636,000
2,636,000
(2)
1,899,765
251,420
6,815
244,605
FL
0
735
(735
)
IL
1
600,000
600,000
31,732
62,322
58,800
3,522
MI
2
112,225
112,225
1,068
106,341
$
2,412
24,142
461
23,681
KY
1
88,364
88,364
769
64,103
1,115
15,853
231
15,622
OH
4
198,031
198,031
1,851
187,753
4,117
48,933
461
48,472
MO
1
3,303,464
482,092
0
482,092
LA
6
5,636,053
5,636,053
637,447
1,240,853
154,203
1,086,650
LA
7
7,015,989
7,015,989
727,786
1,299,275
174,669
1,124,606
IN
1
5,001,933
5,001,933
3,229,039
506,300
131,479
374,821
TN
1
771,125
(3)
535,186
(3)
235,939
PA
1
156,267
(3)
(12,221
)(3)
168,488
Table of Contents
Part 2 Revenues earned for the Year Ended
Part 1 Real Estate Owned at December 31, 2004 Accounted for Under the:
December 31, 2004
Operating Method
Financing Method
Rent Due
and Accrued
Expended for
Amount
or Received
Minimum Lease
Total
Interest,
Carried at
in Advance at
Payments Due
Revenue
Depreciation,
Net Income
No. of
Amount of
Initial Cost
Cost of
Close of
Reserve for
End of
Net
and Accrued at
Applicable
Taxes, and
Applicable
State
Locations
Encumbrances
to Company
Improvements
Period
Depreciation
Period
Investment
End of Period
to Period
Other Expenses
to Period
NJ
1
113,765
(3)
3,227
(3)
110,538
AL
1
0
(3)
44,213
(3)
(44,213
)
GA
1
91,680
29,053
62,627
VA
1
904,766
904,766
(2)
32,502
0
39,460
(39,460
)
VA
1
861,134
861,134
46,236
0
21,793
(21,793
)
SC
2
1,450,047
1,450,047
671,374
56,238
80,407
(24,169
)
SC
1
153,365
153,365
(2)
103,365
0
3,851
(3,851
)
CA
1
0
38
(38
)
OH
1
3,053,550
290,655
0
290,655
KY
1
641,691
(3)
428,744
(3)
212,947
KY
1
932,538
(3)
596,187
(3)
336,351
OH
1
0
(3)
65,756
(3)
(65,756
)
OH
1
1,629,713
1,629,713
123,285
243,750
54,793
188,957
OR
1
31,096,664
45,903,530
3,984,278
2,526,316
1,457,962
WI
1
14,855,137
22,065,852
22,065,852
(2)
2,243,143
2,788,657
1,224,533
1,564,124
LA
1
48,984
(3)
1,545
(3)
47,439
MI
1
8,844,225
8,844,225
(2)
2,380,429
1,245,569
4,241
1,241,328
NV
1
0
810
(810
)
FL
4
862,367
862,367
516,348
100,359
3,313
97,046
NY
1
136,332
(3)
21,304
(3)
115,028
WI
1
5,696,064
9,028,574
9,028,574
(2)
1,526,831
(75,748
)
903,041
670,448
232,593
NY
1
137,100
(3)
0
(3)
137,100
NJ
1
55,565
(3)
45
(3)
55,520
VA
1
2,158,099
2,158,099
115,294
109,255
207,934
(98,679
)
MI
1
3,819,320
8,303,219
895,025
356,606
538,419
OK
1
0
506
(506
)
KY
1
340,321
340,321
3,544
36,000
3,686
32,314
MI
1
0
(3)
72,842
(3)
(72,842
)
TN
1
4,583
(3)
150
(3)
4,433
NY
1
262,357
262,357
30,311
(15,727
)
31,453
6,062
25,391
TX
1
0
5,077
(5,077
)
NY
1
261,122
(3)
22,972
(3)
238,150
PA
1
400,000
400,000
(2)
0
44,785
(44,785
)
NJ
1
747,116
747,116
57,759
150,800
25,671
125,129
CA
1
66,565
(3)
(12,192
)(3)
78,757
AL
1
6,926,225
11,550,899
112,579
11,663,478
(1)(2)
4,107,054
2,078,098
1,650,167
427,931
NY
1
13,232
(3)
4,002
(3)
9,230
PA
1
12,000
(3)
4,002
(3)
7,998
PA
1
6,751
(3)
4,002
(3)
2,749
MA
1
6,751
(3)
4,002
(3)
2,749
NJ
1
6,751
(3)
4,002
(3)
2,749
NY
1
917
(3)
0
(3)
917
Table of Contents
Part 2 Revenues Earned for the Year Ended
Part 1 Real Estate Owned at December 31, 2004 Accounted for Under the:
December 31, 2004
Operating Method
Financing Method
Rent Due
and Accrued
Expended for
Amount
or Received
Minimum Lease
Interest,
Carried at
in Advance at
Payments Due
Total Revenue
Depreciation,
Net Income
No. of
Amount of
Initial Cost to
Cost of
Close of
Reserve for
End of
Net
and Accrued at
Applicable to
Taxes, and
Applicable to
State
Locations
Encumbrances
Company
Improvements
Period
Depreciation
Period
Investment
End of Period
Period
Other Expenses
Period
CA
1
2,569,705
2,830
2,572,535
(2)
82,237
462,931
153,631
309,300
GA
1
2,581,575
265,158
23,000
242,158
TN
1
614,762
506,345
108,417
TN
1
228,172
184,120
44,052
IL
1
6,952,206
257,158
7,209,364
(2)
4,186,890
795,016
57,952
737,064
CA
1
13,885
(3)
0
(3)
13,885
RI
1
745,050
10,430
72,394
0
72,394
NH
1
2,894,284
(43,667
)
252,370
5,207
247,163
PA
1
2,138,678
527,221
902
526,319
NY
1
9,925,579
14,583,060
14,583,060
416,659
(49,172
)
1,122,237
1,110,043
12,194
91,895,527
119,890,855
14,640,582
134,531,437
27,392,745
(181,983
)
89,192,686
(25,593
)
33,514,240
16,644,625
16,869,615
(27,477,426
)
(74,523,721
)
(369,951
)
(74,893,672
)
(16,872,519
)
(16,355,177
)
(8,137,718
)
(8,217,459
)
64,418,101
45,367,134
14,270,631
59,637,765
10,520,226
(181,983
)
89,192,686
(25,593
)
17,159,063
8,506,907
8,652,156
(3,700,000
)
(3,912,000
)
MA
37,087,739
954,952
38,042,691
9,148,267
9,848,167
10,056,181
(208,014
)
FL
1,602,255
(3)
1,297,717
(3)
304,538
FL
5,310,365
79,105
5,389,470
719,824
3,002,000
2,618,000
384,000
FL
16,893,964
16,893,964
326,262
5,626,869
7,169,226
(1,542,357
)
0
42,398,104
17,928,021
60,326,125
10,194,353
0
0
0
20,079,291
21,141,124
(1,061,833
)
(1,602,255
)
(1,297,717
)
(304,538
)
$
60,718,101
$
87,765,238
$
32,198,652
$
119,963,890
$
20,714,579
$
(181,983
)
$
85,280,686
$
(25,593
)
$
35,636,099
$
28,350,314
$
7,285,785
(1)
The Company owns a 70% interest in the joint venture which owns
this property.
(2)
Such properties are being classified as held for sale at
12/31/04.
(3)
Sold in 2004 and included in discontinued operations.
Table of Contents
$
161,158
32,866
1,919
(350
)
(74,720
)
(909
)
$
119,964
$
43,189
5,274
(42
)
(27,706
)
$
20,715
$
137,356
(1,919
)
(42,044
)
9,880
(14,080
)
$
89,193
Table of Contents
4.
Net income applicable to the period in Schedule III is
reconciled with net earnings as follows:
$
7,225
36,649
(1)
6,355
28,186
(2)
44,418
3,133
125,966
9,806
37,195
7,914
54,915
71,051
40,159
5,262
(15,600
)
(23,619
)
77,253
83,720
$
160,973
(1)
Includes depreciation expense of $23,516 and $10,100 of income
tax expense.
(2)
Includes income tax expense of $6,663.
Table of Contents
$
303,460
1,675
5,065
(146,416
)
(2,626
)
$
161,158
$
54,978
8,605
(20,153
)
(241
)
$
43,189
$
155,458
(5,065
)
(7,708
)
13,115
(18,444
)
$
137,356
$
11,631
24,064
(1)
4,136
19,522
(2)
Table of Contents
22,583
3,061
84,997
6,850
2,449
5,912
15,211
69,786
7,121
(19,759
)
(1,503
)
2,607
58,252
11,772
$
70,024
(1)
Includes depreciation expense of $20,222 and income tax benefit
of $1,798.
(2)
Includes income tax expense of $225 and interest expense of
$11,165.
Table of Contents
$
273,887
20,886
13,503
(1,992
)
(2,824
)
$
303,460
$
48,057
7,105
(184
)
$
54,978
$
176,757
(13,503
)
(257
)
(1,560
)
14,722
(20,663
)
(38
)
$
155,458
Table of Contents
$
12,628
6,845
(1)
20,384
9,415
(2)
30,569
2,720
82,561
7,029
5,306
1,505
13,840
68,721
8,990
(8,476
)
(353
)
(3,750
)
(1,943
)
63,189
7,507
$
70,696
(1)
Includes depreciation expense of $20,209 and income tax expense
of $4,970.
(2)
Includes income tax expense of $5,068 and interest expense of
$18,964.
Table of Contents
Amount at Which
Carried at Close
Reserve for
State
of Year
Depreciation
$
24,057
$
1,606
600
32
5,002
3,229
989
527
12,621
1,365
44,310
11,444
112
0
339
173
415
17
747
58
15,751
551
3,464
459
2,142
151
1,450
671
6,046
419
1,919
13
$
119,964
$
20,715
Table of Contents
Net
State
Investment
$
18,938
2,583
973
64
8,410
3,303
2,894
3,241
45,903
2,139
745
$
89,193
128
Exhibit 4.3
Depositary Receipt for Limited Partner Interest in
American Real Estate Partners, L.P.
(A Limited Partnership Under the laws of Delaware)
This Receipt is transferable in New York, New York
A TRANSFEREE OF THE DEPOSITARY UNITS EVIDENCED HEREBY WILL NOT BE RECOGNIZED BY THE DEPOSITARY OR THE PARTNERSHIP UNLESS AND UNTIL THE TRANSFEREE SUBMITS THE TRANSFER APPLICATION CONTAINED ON THE REVERSE SIDE HEREOF.
SEE REVERSE FOR CERTAIN DEFINITIONS.
Depositary receipt for limited partner interest in American Real Estate Partners, L.P. (A Limited Partnership under the laws of Delaware). This Receipt is transferable in New York, New York.
1. Registrar and Transfer Company, organized under the laws of the State of New York, hereby certifies that ___is the registered owner of ___ Depositary Units which are units of interest in American Real Estate Partners, L.P. (AREP), a limited partnership established under the Delaware Revised Uniform Limited Partnership Act. The Depositary Units correspond to units of interest in AREP (AREP Units) that have been deposited under the Depositary Agreement hereinafter identified. The Limited Partnership Agreement under which AREP was organized and is existing, copies of which are on file at the Depositarys corporate office in New York, New York, sets forth the rights, preferences and limitations of AREP Units and Depositary Units.
2. Receipts, Depositary Agreement. Depositary Receipts (Receipts), of which this Receipt is one, are issued upon the terms and conditions set forth in a Depositary Agreement, dated as of July 1, 1987, as it may be amended from time to time in accordance with its terms (the Depositary Agreement), between and among AREP, the Depositary, American Property Investors, Inc., (API), a Delaware corporation, as general partner of AREP (the General Partner) and as attorney-in-fact of limited partners in AREP and all holders from time to time of Receipts issued under the Depositary Agreement. The Depositary Agreement, copies of which are on file at the Depositarys corporate office in New York, sets forth the rights of holders of Receipts, each of whom becomes a party to the Depositary Agreement by acceptance of a Receipt, and the rights and duties of the Depositary in respect of the Depositary Units and all other property and cash from time to time held under the Depositary Agreement. The statements made on the face and the reverse of this Receipt are summaries of certain provisions of the Depositary Agreement and are subject to the detailed provisions thereof, to which reference is hereby made.
3. Transfers, Split-Ups, Combinations. This Receipt is transferable on the books of the Depositary upon surrender of this Receipt by the holder hereof, in person or by duly authorized attorney, so the Depositary at its corporate offices in New York, New York, or at such other office or offices as the Depositary may designate, properly endorsed or accompanied by an instrument of transfer properly executed by the transferor and accompanied by a Transfer
Application properly executed by the transferee, and upon such transfer the Depositary shall, directly or through an agent, issue and deliver a Receipt to or upon the order of the Person entitled thereto; provided however, a transferee will only be admitted as a Submitted Limited Partner of the Partnership in accordance with the provisions of Section 11.02 of the Agreement of Limited Partnership of AREP (the Partnership Agreement). This Receipt may be split into other Receipts, or combined with other Receipts into one Receipt, evidencing the same aggregate number of Depositary Units as the Receipt or Receipts surrendered, except that the Receipt shall be issued representing a fraction of a Depositary Unit.
4. Conditions to Signing and Delivery, Transfer, Etc. of Receipt . Before the execution and delivery, transfer, split-up, combination, surrender or exchange of this Receipt, the Depositary may require (a) payment of a sum sufficient for reimbursement of any tax or other governmental charge with respect thereto (including any such tax or charge with respect to AREP withheld or withdrawn), (b) production of proof satisfactory to it as to the identity and genuineness of any signature or endorsement or as to the due authorization of the action, (c) proof of such information and execution of such documents by the transferor and/or the transferee as it may deem necessary and (d) compliance with such other conditions as may be imposed under applicable laws and regulations.
5. Suspensions of Delivery, Transfer, Etc. The deposit of AREP Units, the delivery of this Receipt against Depositary Units of the transfer, surrender or exchange of this Receipt may be suspended during any period when the Register of Record Holders is closed or at any time and from time to time because of any requirement of law, any governmental body or commission, or any securities exchange upon which Depositary Units may be listed, or when suspension is otherwise deemed necessary or advisable by the Depositary, AREP or the General Partner or under any provision of the Depositary Agreement or the Partnership Agreement.
6. Effect of Acceptance and Transfer of Receipts. By acceptance of this Receipt, the person to whom it is delivered or the transferee thereof becomes a party to the Depositary Agreement and is deemed to be bound by the terms and conditions of the Depositary Agreement and the Receipt. By transfer of this Receipt, the transferor hereby gives the transferee the right to submit a Transfer Application and request to become a Substituted Limited Partner in AREP.
7. Status of Record Holder. Upon delivery of this Receipt by the Depositary in the name of a transferee, the Record Holder, pending his admission as a Substituted Limited Partner in AREP, has the rights of an assignee under the Delaware Revised Uniform Limited Partnership Act.
8. Requirement of Execution. The holder of this Receipt shall not be entitled to any benefits under the Depositary Agreement and this Receipt shall not be valid or obligatory for any purpose unless this Receipt has been executed by and on behalf of the Depositary by the manual signature of a duly authorized employee or the manual signature of a duly authorized employee of the Registrar.
FURTHER CONDITIONS AND AGREEMENTS FORMING PART OF THIS RECEIPT APPEAR ON THE REVERSE SIDE
FURTHER CONDITIONS AND AGREEMENTS FORMING
PART OF THIS RECEIPT
9. Surrender of Receipts and Withdrawal of Units. Upon surrender of this Receipt to the Depositary at its corporate office in New York, New York, or at such other office or offices as it may designate, and subject to the provisions of the Depositary Agreement, the Record Holder of this Receipt, who is a Limited Partner in AREP, is entitled to delivery to him of an AREP Certificate evidencing the AREP Units corresponding to the Depositary Units evidenced by this Receipt.
10. Payment of Taxes or Other Governmental Charges. If any tax or other governmental charge becomes payable with respect to this Receipt or with respect to Depositary Units evidenced by this Receipt, such tax (including transfer taxes, if any) or governmental charge shall be payable by the Record Holder of this Receipt. Transfer of this Receipt or any withdrawal of AREP Units corresponding to the Depositary Units evidenced by this Receipt may be refused until such payment is made and any distribution may be withheld and be applied to payment of such tax or other governmental charge with the holder of this Receipt remaining liable for any deficiency.
11. Warranties by Depositor. Every Person depositing AREP Units under the Depositary Agreement shall be deemed thereby to represent and warrant that such Person is or is duly authorized to be acting for a Limited Partner as defined in the Depositary Agreement.
12. Amendment. Any provision of the Depositary Agreement, including the form of Receipt, may at any time and from time to time be amended in any respect by mutual agreement of AREP and the Depositary, so long as such amendment does not impair the right of a Record Holder who is a Limited Partner to surrender a Depositary Unit and withdraw from deposit any of the Depositary Units evidenced thereby or to redeposit Units previously withdrawn from deposit and receive a Receipt evidencing such redeposited Units. Any amendment of the Depositary Agreement that imposes any fee, tax or charge (other than fees and charges provided for in the Depositary Agreement) upon, or otherwise adversely affects the rights of Record Holders shall not be effective until the expiration of 30 days after notice of the amendment has been given to the Record Holders. Every Record Holder at the time any amendment of the Depositary Agreement becomes effective shall be deemed, by continuing to hold a Receipt evidencing Depositary Units, to consent and agree to the amendment and to be bound by the Depositary Agreement as amended thereby.
13. Charges of Depositary. AREP will pay all charges of the Depositary, except for (a) taxes and other governmental charges, (b) AREP Units redeposit fees and (c) such telegram, telex, delivery and other charges as are expressly provided in the Depositary Agreement to be at the expense of Persons depositing or withdrawing AREP Units or holders of Receipts.
14. Title to Receipts . This Receipt (and the Depositary Units evidenced by this Receipt), when properly endorsed or accompanied by an instrument of transfer properly executed by the transferor and accompanied by a Transfer Application properly executed by a transferee, is transferable in accordance with the laws governing transfers of Investment securities, provided however, that it is a condition of this Receipt, and every successive holder hereof by accepting transfer or holding this Receipt consents and agrees, that until this Receipt is transferred on the books of the Depositary, the Depositary and AREP may, notwithstanding any notice to the contrary and notwithstanding any notation of other writing on this Receipt, treat the Record Holder hereof at such time as the absolute owner hereof for all purposes.
15. Distributions. Whenever the Depositary receives from AREP any cash distributable to Record Holders of Depositary Units, the Depositary will, subject to the provisions of the Depositary Agreement, make such distribution to the Record Holders of Receipts on the record date fixed by AREP for purposes of such distribution in proportion to the number of Depositary Units represented by their Receipts, provided however, that the amounts distributed may be reduced by any amount required to be withheld by AREP or the Depositary on account of taxes.
16. Reports. The Depositary will make available for inspection by Record Holders of Receipts at its corporate office in New York, New York, and at such other office or offices as it may deem advisable, any report, financial statement, or communication received from AREP that is both (a) received by the Depositary in its capacity as the depositary of AREP Units and (b) made generally available to the Record Holders of AREP Units or Depositary Units. The Depositary will also send to Record Holders of Receipts copies of reports, financial statements and communications to the extent provided in the Depositary Agreement, when furnished by AREP.
17. Transfer Books. The Depositary will keep books for the transfer of Receipts which, during normal business hours, will be open for inspection by the Record Holders of Receipts upon demonstration of a valid business purpose for such inspection.
18. Immunities of Depositary and AREP. Neither the Depositary nor API (a) assumes any obligation or shall be subject to any liability under the Depositary Agreement to holders of Receipts other than that each of them agrees to use its best judgment and good faith in the performance of such duties as are specifically set forth in the Depositary Agreement, or (b) will be under any obligation to appear in, prosecute or define any action, suit or other proceeding in respect of AREP Units, AREP Certificates, Depositary Units or Receipts that in its opinion may involve it in expense or liability, unless Indemnity satisfactory to it against all expense and liability be furnished, as often as may be required, or (c) will be liable for any action or nonaction by it in reliance upon the advice of or information from legal counsel, accountants, any Person presenting AREP Units for deposit, any holder of a Receipt, or any other Person believed by it in good faith to be competent to give such advise or information. The Depositary and API may rely and shall be protected in acting upon any written notice request; direction or
other document reasonably believed by it to be genuine and to have been signed or presented by the proper Person or Persons.
19. Indemnification. The Depositary will indemnify AREP against and hold it harmless from any liability that may arise out of acts performed or omitted by the Depositary or its agents due to fraud, gross negligence, or willful or criminal misconduct. AREP will indemnify the Depositary against and hold it harmless from any liability that may arise out of acts performed or omitted (a) by the Depositary of any of its agents, except for any liability arising out of fraud, gross negligence, or willful, intentional or criminal misconduct or (b) by AREP or any of its agents, including the costs and expenses of defending itself against any claim of liability reasonably incurred in connection therewith.
20. Resignation and Removal of Depositary. The Depositary may at any time (a) resign upon 60 days written notice of its election to do so delivered to AREP, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment or (b) be removed by AREP upon 60 days written notice effective upon the appointment of a successor depositary and its acceptance of such appointment all as provided in the Depositary Agreement.
21. Termination of Depositary Agreement . Whenever directed by AREP, the Depositary will terminate the Depositary Agreement by mailing notice of termination to the Record Holders of all Receipts then outstanding at least 60 days before the date fixed for termination in such notice. Upon termination of the Depositary Agreement, AREP shall be discharged from all obligations thereunder, except for the obligations to the Depositary with respect to indemnification, charges and expenses. If any receipts remain outstanding after the date of termination, the Depositary thereafter will discontinue all functions and be discharged from all obligations with respect thereto except as specifically provided in the Depositary Agreement.
22. Governing Law . The Depositary Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.
23. Defined Terms
. Any term not expressly defined herein shall have the definition given in
there Depositary Agreement.
ABBREVIATIONS
The following abbreviations, when used in this inscription on the face of this Receipt, shall be
construed as though they were written out in full according to applicable laws or regulations:
UNIF GIFT MIN ACT . . . .
Custodian . . . .
(Cust) (Minor)
under Uniform Gifts to
Minors Act
(State)
Additional abbreviations may also be used, though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
the within Receipt and all rights and interests represented thereby, and irrevocably constitutes and appoints
|
, attorney, |
Dated
|
|
Signature
|
|
Signature Guaranteed
|
|
Note : The signature to any endorsement hereon must correspond with the name as written upon the face of the Receipt, in every particular, without alteration or enlargement or any change whatever. If the endorsement is executed by an attorney, executor, administrator, trustee or guardian, the person executing the endorsement must give his full title in such capacity, and proper evidence or authority to act in such capacity. If not on file with the Depositary, must be forwarded with this Receipt. The signature must be guaranteed by an authorized employee of a bank, trust company or member or a national securities exchange.
No assignment of the Depositary Units evidenced by a Depositary Receipt will be registered on the books of Registrar and Transfer Company (the Depositary) or of American Real Estate Partners, L.P. (the Partnership) unless an Application for Transfer of Depositary Units has been executed and delivered by an assignee. An assignor of Depositary Units shall have no duty to an assignee with respect to the requirement of delivery of an executed Transfer Application in order for an assignee to obtain registration of transfer of the Depositary Units.
APPLICATION FOR TRANSFER OF DEPOSITARY UNITS
The undersigned (the Applicant) hereby applies for transfer to the name of the Applicant of the Depositary Units evidenced by a Depositary Receipt.
The Applicant (i) agrees to be bound by the terms and conditions of the Depositary Agreement (the Depositary Agreement) among the Partnership, the Depositary and American Property Investors, Inc. (the General Partner) and the Depositary Receipt, (ii) requests admission as a Substituted Limited Partner in the Partnership and agrees to comply with and be bound by and hereby executes the Agreement of Limited Partnership of the partnership, as amended and restated to the date hereof (the Partnership Agreement), and the Depositary Agreement, (iii) represents and warrants that the Applicant has all right, power and authority necessary to enter into the Depositary Agreement and the Partnership Agreement, (iv) appoints the General Partner the Applicants attorney to execute, swear to, acknowledge and file any document, including the Partnership Agreement, an amendment of the Partnership Agreement or the Certificate of Limited Partnership of the Partnership, necessary or appropriate for the Applicants admission as a Substituted Limited Partner in the Partnership Agreement (v) makes
the powers of attorney provided for in the Partnership Agreement and set forth below and (vi) makes the waivers and gives the approvals contained in the Partnership and the Depositary Agreement.
The Applicant hereby constitutes and appoints the General Partner of the Partnership (and any successor by merger, assignment, election or otherwise) and each of the General Partners authorized officers and attorneys-in-fact, with full power of substitution as the Applicants true and lawful agent and attorney-in-fact, with full power and authority in the Applicants name, place and stead and for the Applicants use or benefit to make, execute, verify, consent to, swear to, acknowledge, make oath as to, publish, deliver, file and/or record in the appropriate public offices, (i) all certificates and other instruments, including, at the option of the General Partner, the Partnership Agreement and the Certificate of Limited Partnership of the partnership and all amendments and restatements thereof, that the General Partner deems appropriate or necessary to qualify, or continue the qualification of, the Partnership as a limited partnership (or a partnership in which the Applicant has limited liability) in the State of Delaware and all jurisdictions in which the partnership may or may intend to conduct business or own property; (ii) all other certificates, instruments and documents as may be requested by, or may be appropriate under the laws of any state or other jurisdiction in which the Partnership may or may intend to conduct business or own property; (iii) all instruments that the General Partner deems appropriate or necessary to reflect any amendment, change or modification of this Agreement in accordance with the terms hereof, (iv) all conveyances and other instruments or documents that the General Partner deems appropriate or necessary to effectuate or reflect the dissolution, termination and liquidation of the Partnership pursuant to the terms of the Partnership Agreement; (v) any and all financing statements, continuation statements, mortgages or other documents necessary to grant to or perfect for secured creditors of the Partnership, including the General Partner and affiliates, a security interest, mortgage, pledge or lien on all or any of the Partnership assets; (vi) all instruments or papers required to continue the business of the Partnership pursuant to Article XIII of the Partnership Agreement; (vii) all Instruments (including the Partnership Agreement and the Certificate of Limited Partnership and amendments and restatements thereof) relating to the admission of any partner pursuant to Article XI of the Partnership Agreement and (viii) all other instruments as the attorneys-in-fact or any one of them may deem necessary or advisable to carry out fully the provisions of the Partnership Agreement in accordance with its terms. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and not be affected by the subsequent death, incompetence, disability, incapacity, dissolution, bankruptcy or termination of the Applicant and the transfer of all or any portion of the Applicants interests in the Partnership and shall extend to the Applicants heirs, successors, assigns and personal representatives.
Date
|
|
Signature of Applicant
|
|
Signature of Joint Applicant (if any)
|
|
Social Security or other taxpayer identification number of Applicant
|
|
Residence Address
|
|
Purchase price (including commissions, if any)
Type of Entity (Check one):
Individual |
Partnership |
Corporation |
||
Trust |
Tax Exempt |
Other (specify) |
If the Applicant is a broker, dealer, bank, trust company, clearing corporation, other nominee holder or an agent of any of the foregoing, and is holding for the account of any other person, this application should be completed by an officer thereof, or, in the case of a broker or dealer, by a registered representative who is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or, in the case of any other nominee holder, a person performing a similar function. If the Applicant is a broker, dealer, bank, trust company, clearing corporation, other nominee holder or an agent of any of the foregoing, the above certification as to any person for whom the Applicant will hold the Depositary Unit Shall be made to the best of the Applicants knowledge.
EXHIBIT 4.4
No assignment of the Depositary Units evidenced by a Depositary Receipt will be registered on the books of Registrar and Transfer Company (the Depositary) or of American Real Estate Partners, L.P. (the Partnership) unless an Application for Transfer of Depositary Units has been executed and delivered by an assignee. An assignor of Depositary Units shall have no duty to an assignee with respect to the requirement of delivery of an executed transfer application in order for an assignee to obtain registration of transfer of the Depositary Units.
APPLICATION FOR TRANSFER OF DEPOSITARY UNITS
The undersigned (the Applicant) hereby applies for transfer to the name of the Applicant of the Depositary Units evidenced by a Depositary Receipt.
The Applicant (i) agrees to be bound by the terms and conditions of the Depositary Agreement (the Depositary Agreement) among the Partnership, the Depositary and American Property Investors, Inc. (the General Partner) and the Depositary Receipt, (ii) requests admission as a Substituted Limited Partner in the Partnership and agrees to comply with and be bound by and hereby executes the Amended and Restated Agreement of Limited Partnership of the Partnership (the Partnership Agreement), and the Depositary Agreement, (iii) represents and warrants that the Applicant has all right, power and authority necessary to enter into the Depositary Agreement and the Partnership Agreement, (iv) appoints the General Partner the Applicant's attorney to execute, swear to, acknowledge and file any document, including the Partnership Agreement, an amendment of the Partnership Agreement and the Certificate of Limited Partnership of the Partnership, necessary or appropriate for the Applicants admission as a Substituted Limited Partner in the Partnership and as a party to the Partnership Agreement, (v) makes the powers of attorney provided for in the Partnership Agreement and set forth below and (vi) makes the waivers and gives the approvals contained in the Partnership Agreement and the Depositary Agreement.
The Applicant hereby constitutes and appoints the General Partner of the Partnership (and any successor by merger, transfer, election or otherwise) and each of the General Partners authorized officers and attorneys-in-fact, with full power of substitution as the Applicants true and lawful agent and attorney-in-fact, with full power and authority in the Applicants name, place and stead and for the Applicants use or benefit to make, execute, verify, consent to, swear to, acknowledge, make oath as to, publish, deliver, file and/or record in the appropriate public offices, (i) all certificates and other instruments, including, at the option of the General Partner, the Partnership Agreement and the Certificate of Limited Partnership of the Partnership and all amendments and restatements thereof, that the General Partner deems appropriate or necessary to qualify, or continue the qualification of, the Partnership as a limited partnership (or a partnership in which the Applicant has limited liability) in the State of Delaware and all jurisdictions in which the Partnership may or may intend to conduct business or own property; (ii) all other certificates, instruments and documents as may be requested by, or may be appropriate under the laws of any state or other jurisdiction in which the Partnership may or may intend to conduct business or own property; (iii) all instruments that the General Partner deems appropriate or necessary to reflect any amendment, change or modification of this Agreement in accordance with the terms hereof; (iv) all conveyances and other instruments or documents that the General Partner deems appropriate or necessary to effectuate or reflect the dissolution, termination and
L-1
liquidation of the Partnership pursuant to the terms of the Partnership Agreement; (v) any and all financing statements, continuation statements, mortgages or other documents necessary to grant to or perfect for secured creditors of the Partnership, including the General Partner and affiliates, a security interest, mortgage, pledge or lien on all or any of the Partnership assets; (vi) all instruments or papers required to continue the business of the Partnership pursuant to Article XIII of the Partnership Agreement; (vii) all instruments (including the Partnership Agreement and the Certificate of Limited Partnership of the Partnership and amendments and restatements thereof) relating to the admission of any partner pursuant to Article XI of the Partnership Agreement and (viii) all other instruments as the attorneys-in-fact or any one of them may deem necessary or advisable to carry out fully the provisions of the Partnership Agreement in accordance with its terms.
The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and not be affected by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or termination of the Applicant and the transfer of all or any portion of the Applicants interest in the Partnership and shall extend to the Applicants heirs, successors, assigns and personal representatives.
Date
|
Signature of Applicant | Signature of Joint Applicant (if any) |
Social Security or other taxpayer identification number of Applicant
|
Residence Address |
Purchase Price (including commissions, if any)
|
City State Zip Code |
Type of Entity (check one):
Individual | Partnership | Corporation | ||||||||
|
Trust | Tax Exempt | Other (specify) | ||||||||||
|
If the Applicant is a broker, dealer, bank, trust company, clearing corporation, other nominee holder or an agent of any of the foregoing, and is holding for the account of any other person, this application should be completed by an officer thereof, or, in the case of a broker or dealer, by a registered representative who is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or, in the case of any other nominee holder, a person performing a similar function. If the Applicant is a broker, dealer, bank, trust company, clearing corporation, other nominee holder or an agent of any of the foregoing, the above certification as to any person for whom the Applicant will hold the Depositary Unit shall be made to the best of the Applicants knowledge.
L-2
Exhibit 10.1
DISTRIBUTION REINVESTMENT PLAN
American Real Estate Partners, L.P. (the Partnership), a Delaware limited partnership, governed under the Agreement of Limited Partnership of the Partnership, dated as of April 29, 1987 (the Partnership Agreement), by and among American property Investors, Inc., a Delaware corporation, as general partner (the General Partner), Julia DeSantis, as organizational limited partner, and the limited partners of the Partnership (the Limited Partners), has adopted a Distribution Reinvestment Plan (the Plan), the terms and conditions of which follow. Any term used herein which is defined in the Partnership Agreement shall have the same meaning herein as therein, unless otherwise defined or unless the context otherwise indicates.
1. The effective date of the Plan shall be January 1, 1988.
2. As agent for participants (the Participants) in the Plan, Registrar and Transfer Company (the Agent) will receive all distributions paid after the effective date of the Plan in respect of Units and Depositary Units held by each Participant and in respect of any Depositary Units acquired under the Plan. The Agent will apply such funds, after deducting applicable service charges specified in Paragraph 8 below, as follows:
Commencing with the distribution for the first full calendar quarter after the effective date of the Plan, all distributions in respect of the Depositary Units and Units of the Participants will be paid over to the Agent, which will purchase additional Depositary Units, to the extent available at a price deemed reasonable by the Agent, for the Participants accounts from securities broker-dealers to whom it will pay commissions.
Purchases hereunder may be made on any securities exchange on which such Depositary Units are traded, in the over-the-counter market, or in negotiated transactions, and shall be made at prices competitive with prevailing market prices and on such other terms as the Agent may determine.
3. Limited Partners may become Participants in the Plan at any time commencing with the effective date of the Plan by completing the appropriate authorization form available from the Agent or the General Partner. Only Limited Partners may become Participants in the Plan, not Non-Consenting Investors or Subsequent Transferees.
4. In making purchases for the Participants accounts, the Agent may commingle the funds of any Participant with those of other Participants. The price at which Depositary Units shall be deemed to have been acquired for a Participants account shall be the market price (including such Participants allocable portion of the aggregate brokerage commissions and all costs of purchasing except the service charge specified in Paragraph 8 below) of all Depositary Units purchased for the Participants in the Plan with the proceeds of a single distribution. Such distributions shall be invested by the Agent promptly following the payment date with respect thereto, and in no event later than 30 days from such receipt. However, under certain circumstances, observance of the rules and regulations of the Securities and Exchange Commission may require temporary suspension of such purchases or may require that purchases be spread over a period of more than 30 days, in which event such purchases will be made or resumed as or when permitted by such rules and regulations. The Agent may rely and act upon an opinion of counsel in this respect, and in such event will not be accountable for such inability
to make all purchases prior to the end of such 30-day period. To the extent the Agent is unable to make purchases in accordance with the terms of this paragraph, distributions received by the Agent on behalf of the Participants will be distributed by the Agent to the Participants. The Agent will hold the Depositary Units of all Participants together in the name of its nominee.
Neither the Partnership nor the Agent shall have any responsibility or liability as to the value of the Depositary Units or any change in the value of the Depositary Units acquired for the Participants account.
5. Pending investment, funds shall be held in a non-interest bearing account maintained by the Agent in a bank having capital and surplus of not less than $100,000,000. The bank account shall be specifically designated as being for the benefit of the Reinvestment Plan and disbursements shall be permitted from such account only for purchases of Depositary Units or to make distributions to Participants if required pursuant to the terms of Paragraph 4 hereof.
6. The Agent will distribute to Participants proxy solicitation material received by it from the Partnership which is attributable to Depositary Units held in the Plan. The Agent will vote any Depositary Units that it holds for the account of a Participant in accordance with the Participants written instructions. If a Participant gives a proxy to person(s) representing the General Partner covering Depositary Units registered in the Participants name, such proxy will be deemed to be an instruction to the Agent to vote the full Depositary Units in the Participants account in like manner. If a Participant does not direct the Agent as to how the Depositary Units should be voted and does not give a proxy to person(s) representing the General Partner covering these Depositary Units, the Agent will not vote said Depositary Units.
7. The Agent will mail to each Participant a statement of account describing the distributions received, the number of Depositary Units purchased, the purchase price per Depositary Unit, and the total Depositary Units accumulated under the Plan as soon as practicable after all distributions paid on any payment date with respect thereto have been invested (and also as soon as practicable after the sale of Depositary Units described in Paragraph 11). Fractional Depositary Units will be credited to a Participants account computed to three decimal places. No Depositary Receipts representing Depositary Units will be issued for Depositary Units credited to an account until the account is terminated.
8. The charge to each Participant, payable to the Agent, for the services of the Agent shall be five percent (5%) of the amount invested but not less than $.75 or more than $2.50 per investment transaction for each Participants account, plus a proportionate share of the cost of acquiring the Depositary Units for all Participants.
9. No Partcipant shall have any right to draw checks or drafts against his account or to give instructions to the Partnership or the Agent except as expressly provided here.
10. It is understood that reinvestment of distributions does not relieve a Participant of any income tax which may be payable on such distributions.
11. A Participant may terminate an account at any time by written notice to the Agent. To be effective for any distribution, such notice must be received on or before the record date for such payment. The Agent may terminate a Participants individual participation in the Plan, and the Partnership or the Agent may terminate the Plan itself at any time by written notice mailed to a Participant, or to all Participants, as the case may be, at the address or addresses shown on their account or such more recent address as a Participant may furnish to the Agent in
2
writing. Upon termination of the Plan, or upon termination of an individual Participants involvement in the plan, the Agent will send to each Participant a Depositary Receipt evidencing the whole Depositary Units of the Participant standing in such Participants account and, as soon as practicable, will pay in cash the value of any fractional Depositary Units standing to the credit of a Participants account based upon the market price of Depositary Units, determined as set forth below. A Participant who terminates his participation in the Plan may either request that the Agent send Depositary Receipts for the Depositary Units in the account or may request that the Agent sell all or part of such Depositary Units and deliver the net proceeds, after deduction of any applicable brokerage commission or other applicable costs of sale, to the Participant. In the absence of a specific request, the Agent will proceed by the delivery of Depositary Receipts representing the Depositary Units, in accordance with the foregoing. Such sales may, but need not, be made by purchase of Depositary Units for the account of the other Participants. Any such transactions shall be deemed to have been made based upon the price determined as follows, on the day following the date on which individual termination notice is received by the Agent: The last sales price on that day regular way, or if no sale takes place on such day, the average of the closing bid and asked prices the regular way (a) as officially quoted by the principal stock exchange on which the Depositary Units are listed, or (b) if the Depositary Units are not listed on any stock exchange, then as quoted on the principal United States market as determined by the Agent, or (c) if, in the reasonable judgment of the Agent, there exists no principal United States market for the Depositary Units, or no quote is available on any such market, then the average price in privately negotiated transactions known to the Agent. If none of the above are available on such date, then the price shall be determined on the next succeeding day on which any of the above are available. A service charge of $2.50 will be charged by the Agent to the Participant in connection with each termination of a Participants individual participation in the Plan.
If the Agent does not receive instructions from the Participant, if a Participant disposes of all Depositary Units registered on the books of the Partnership in his name, it may, in its discretion, terminate the Participants further participation in the Plan by distributing Depositary Receipts representing the Depositary Units in a Participants account, in accordance with the foregoing, or continue to reinvest the distributions paid in respect of the Depositary Units in the account until otherwise notified in writing.
12. Neither the Partnership nor the Agent shall be liable for any act done in good faith, or for any good faith omission to act, including, without limitation, any claims of liability (a) arising out of failure to terminate a Participants account upon such Participants death prior to receipt of notice in writing of such death, and (b) with respect to the time and the prices at which Depositary Units are purchased or sold for a Participants account.
13. Each Participant agrees to notify the Agent promptly in writing of any change of address. Notices to the Participant may be given by letter addressed to the Participant in his last address of record with the Agent.
14. These terms and conditions may be amended or supplemented by an agreement between the Agent and the Partnership at any time, including but not limited to an amendment to substitute a new Agent to act as agent for the Participants by mailing an appropriate notification to each Participant at his last address of record. Such amendment or supplement shall be deemed conclusively accepted by each Participant except those Participants from whom the Agent receives written notice of termination prior to the effective date thereof.
3
15. This Plan and a Participants election to participate in the Plan shall be governed by the laws of the State of Delaware. The Partnership may terminate the Plan by giving notice at least 10 days prior to the effective date thereof to each Participant at his last address of record. In such case, termination shall be made by distributing the whole Depositary Units held by the Agent under the Plan to each Participant and making cash payments in respect of any fractional Depositary Units held for the account of each Participant, based upon the actual sales price of such Depositary Units less any applicable brokerage commissions or other applicable costs of sale.
4
EXHIBIT 10.2
AMERICAN REAL ESTATE PARTNERS, L.P.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is made as of the ___day of ___, 1995 by and between AMERICAN REAL ESTATE PARTNERS, L.P., a Delaware limited partnership (the Partnership), and X LP, a Delaware limited Partnership (X LP).
In consideration of the mutual promises contained herein, the parties hereto, intending to be legally bound, do hereby agree as follows:
1. Registration Rights .
The Partnership covenants and agrees as follows:
1.1. Definitions .
(a) The terms register, registered, and registration refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act of 1933, as amended (the 1933 Act), and the declaration or ordering of effectiveness of such registration statement or document;
(b) The term Registration Rights means rights to cause the registration of Registrable Securities.
(c) The term Registrable Securities means those depositary units representing limited partnership interests in the Partnership (the Depositary Units) and 5% cumulative pay-in-kind redeemable convertible preferred units representing limited partner interests in the Partnership (the Preferred Units), which Holder now owns or hereinafter acquires. Registrable Securities will cease to be such when (x) a registration statement covering such Registrable Securities has been declared effective and they have been disposed of pursuant to such effective registration statement; (y) they are sold, transferred or distributed to the public pursuant to Rule 144 (or any similar provision then in force under the 1933 Act); or (z) they are not required to be sold pursuant a registration statement.
(d) The number of Registrable Securities then outstanding shall be determined by adding the number of Depositary Units or Preferred Units outstanding which are, and the number of Depositary Units issuable pursuant to then exercisable or convertible securities which upon issuance would be, Registrable Securities;
(e) The term Holder means X LP and its Affiliates.
(f) The terms Form S-3, Form S-4 and Form S-8 mean such respective forms under the 1933 Act as in effect on the date hereof or any successor registration forms to Form S-3, Form S-4 and Form S-8, respectively, under the 1933 Act subsequently adopted by the Securities and Exchange Commission (Commission).
(g) Affiliate shall mean, with respect to any Person, any other Person which directly or indirectly controls, or is controlled by, or is under common control with, such Person. The term control means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the term controlled shall have a meaning correlative to the foregoing.
1.2. Request for Registration .
(a) If the Partnership shall receive at any time a written request from Holder that the Partnership effect the registration under the 1933 Act, then the Partnership agrees to, within five days of the receipt thereof, subject to the limitations of this Section 1.2, use its best efforts to effect such a registration as soon as practicable and in any event to file within 90 days of the receipt of such request a registration statement under the 1933 Act covering all the Registrable Securities which Holder shall in writing request (given within 20 days of receipt of the notice given by the Partnership pursuant to this Section 1.2(a)) to be included in such registration and to use its best efforts to have such registration statement become effective.
(b) If Holder submits a registration request hereunder and intends to distribute the Registrable Securities covered by a registration statement filed pursuant to that request by means of an underwriting, it shall so advise the Partnership as a part of its request made pursuant to this Section 1.2. In such event, the right of Holder to include its Registrable Securities in such registration shall be conditioned upon its participation in such underwriting and the inclusion of its Registrable Securities in the underwriting to the extent provided herein. Holder shall (together with the Partnership as provided in subsection 1.4(e)) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by Holder and reasonably satisfactory to the Partnership.
(c) Notwithstanding the foregoing, (i) the Partnership may, but shall not be obligated to, effect the filing of a registration statement pursuant to this Section 1.2 during the 90 days following the effective date of a registration statement pertaining to an underwritten public offering of securities for the account of the Partnership, provided the Partnership is at all times during such period diligently pursuing such registration, and (ii) if the Partnership shall furnish to Holder requesting a registration statement pursuant to this Section 1.2 a certificate signed by the General Partner stating that in the good faith judgment of the General Partner on behalf of the Partnership, it would not be in the best interests of the Partnership and its limited partners generally for such registration statement to be filed, the Partnership shall have the right to defer such filing for a period of not more than 210 days after receipt of the request of Holder; provided , however , that the Partnership may not utilize the right set forth in this subsection (d) (ii) more than once
2
in any twelve-month period.
1.3. Partnership Registration . If (but without any obligation to do so) the Partnership proposes to register (including for this purpose a registration effected by the Partnership for unitholders other than Holder, in their capacity as such) any of its Depositary Units or other securities under the 1933 Act in connection with the public offering of such securities solely for cash (other than a registration on Form S-8 relating solely to the sale of securities to participants in the Partnership Nonqualified Unit Plan, or a registration on Form S-4 or any successor form), the Partnership shall, at such time, promptly give Holder written notice of such registration. Upon the written request of Holder given within 20 days after mailing of such notice by the Partnership, the Partnership shall, subject to the provisions of Section 1.8, use its best efforts to cause a registration statement covering all of the Registrable Securities that Holder has requested to be registered to become effective under the 1933 Act. Notwithstanding the foregoing, the Partnership shall be under no obligation to complete any offering of its securities it proposes to make and shall incur no liability to Holder for its failure to do so.
1.4. Obligations of the Partnership . Whenever required under this Section 1 to use its best efforts to effect the registration of any Registrable securities, the Partnership shall, as expeditiously as possible:
(a) Prepare and file with the Commission a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of Holder, keep such registration statement effective for up to the lesser of 180 days or until Holder has informed the Partnership in writing that the distribution of its securities has been completed.
(b) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement, and use its best efforts to cause each such amendment to become effective, as may be necessary to comply with the provisions of the 1933 Act with respect to the disposition of all securities covered by such registration statement.
(c) Furnish to Holder such reasonable number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the 1933 Act, and such other documents as it may reasonably request in order to facilitate the disposition of Registrable Securities owned by it.
(d) Use its best efforts to register or qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by Holder, provided that the Partnership shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdiction.
3
(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. If Holder participates in such underwriting, it shall also enter into and perform its obligations under such an agreement, including furnishing any opinion of counsel or entering into a lock-up agreement reasonably requested by the managing underwriter.
(f) Notify Holder, whose Registrable Securities are covered by such registration statement, at any time when a prospectus relating thereto covered by such registration statement is required to be delivered under the 1933 Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and promptly file such amendments and supplements which may be required pursuant to subparagraph (b) of this Section 1.4 on account of such event and use its best efforts to cause each such amendment and supplement to become effective; provided , however , once Holder is notified by the Partnership that there is an inaccuracy in the Partnerships registration statement or prospectus, Holder will thereafter immediately discontinue the distribution of such registration statement or prospectus and the disposition of Registrable Securities pursuant to such registration statement or prospectus until such time as Holder has received a copy or copies of an amended or supplemental registration statement or prospectus, and is so directed by the Partnership in its notice to Holder. Holder shall deliver to the Partnership (at the Partnerships expense) all [inaccurate] copies, other than permanent file copies, then in its possession of the registration statement or prospectus covering such Registrable Securities.
(g) Use its best efforts to furnish, at the request of Holder requesting registration of Registrable Securities pursuant to this Section 1, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 1, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated such date, of the counsel representing the Partnership for the purposes of such registration, in form and substance as is customarily given by Partnership counsel to the underwriters in an underwritten public offering, addressed to the underwriters, if any, and to Holder if Holder requested registration of Registrable Securities and (ii) a letter dated such date, from the independent certified public accountant of the Partnership, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to Holder if Holder requested registration of Registrable Securities.
4
1.5. Furnish Information . It shall be a condition precedent to the obligations of the Partnership to take any action pursuant to this Section 1 that Holder shall furnish to the Partnership such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of its Registrable Securities. Holder hereby agrees to notify the Partnership as promptly as practicable of any inaccuracy or change in or addition to the information previously furnished by Holder to the Partnership, which results in any registration statement or prospectus containing an untrue statement of a material fact regarding Holder or the distribution of such Registrable Securities or omitting to state any material fact regarding Holder or the distribution of such Registrable Securities required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing.
1.6. Expenses of Demand Registration . All expenses other than underwriting discounts and commissions relating to Registrable Securities incurred in connection with two (2) requests for registration, filings or qualifications pursuant to Section 1.2 and the registrations, filings or qualifications pursuant to Section 1.11, including, without limitation, all registration, filing and qualification fees, printing and accounting fees, fees and disbursements of counsel for the Partnership, and the reasonable fees and disbursements of counsel selected by Holder shall be borne by the Partnership.
1.7. Expenses of Partnership Registration . The Partnership shall bear and pay all expenses incurred in connection with any registration, filing or qualification of Registrable Securities with respect to the registrations pursuant to Section 1.3 for Holder (which right may be assigned by Holder as provided in Section 1.12), including, without limitation, all registration, filing and qualification fees, printing and accounting fees, underwriting discounts and commissions relating to Registrable Securities fees and disbursements of counsel for the Partnership and the reasonable fees and disbursements of counsel selected by Holder.
1.8. Underwriting Requirements . In connection with any offering involving an underwriting of securities being issued by the Partnership or in connection with any demand registration made by Holder, the Partnership shall not be required under Section 1.3 to include any of Holders securities in such underwriting unless it accepts the terms of the underwriting as agreed upon between the Partnership and the underwriters selected by it, and then only in such quantity, if any, as will not, in the opinion of the underwriters, have a material adverse effect on the price of the securities being offered by the Partnership or Holder. If the managing underwriter for the offering shall advise the Partnership or Holder in writing that the total amount of securities, including Registrable Securities, to be included in such offering exceeds the amount of securities that can be successfully offered, then the Partnership shall be required to include in the offering only that number of such securities, including Registrable Securities, which the managing underwriter believes will not have a material adverse effect on the price of the securities being offered by the Partnership or Holder. If the foregoing provision requires the exclusion of securities from any offering described in this Section, then such exclusion of all securities which unitholders other than Holder seek to include in the offering shall be effected prior to the exclusion of securities which Holder seeks to register.
1.9. Indemnification . In the event any Registrable Securities are included in a registration statement under this Section 1:
5
(a) To the extent permitted by law, the Partnership will indemnify and hold harmless Holder, the officers, directors, partners, agents and employees thereof, any underwriter (as defined in the 1933 Act) therefor and each person, if any, who controls Holder or the underwriter within the meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended (the 1934 Act) against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the 1933 Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (a Violation): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Partnership of the 1933 Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the 1933 Act, the 1934 Act or any state securities law. The Partnership will reimburse Holder, officer, director, partner, agent, employee, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action. The indemnity agreement contained in this subsection 1.9(a) shall not apply to amounts paid in settlement of any loss, claim, damage, liability, or action if such settlement is effected without the consent of the Partnership (which consent shall not be unreasonably withheld), nor shall the Partnership be liable to Holder in any such case for any such loss, claim, damage, liability, or action (i) to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by or on behalf of Holder, underwriter or controlling person or (ii) in the case of a sale directly by Holder, including a sale of such Registrable Securities through any underwriter retained by Holder to engage in a distribution solely on behalf of Holder, such untrue statement or alleged untrue statement or omission or alleged omission was contained in a preliminary prospectus and corrected in a final or amended prospectus, and Holder failed to deliver a copy of the final or amended prospectus at or prior to the confirmation of the sale of the Registrable Securities to the person asserting any such loss, claim, damage or liability in any case where such delivery is required by the 1933 Act.
(b) To the extent permitted by law, Holder will indemnify and hold harmless the Partnership, each of its partners and officers who have signed the registration statement, each person, if any, who controls the Partnership within the meaning of the 1933 Act, each agent and any underwriter for the Partnership, and any other person selling securities in such registration statement or any of its directors, officers, partners, agents or employees or any person who controls such person or underwriter, against any losses, claims, damages, or liabilities (joint or several) to which the Partnership or any such director, officer, controlling person, agent, or underwriter or controlling person, or other person or director, officer or controlling person may become subject, under the 1933 Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon
6
and in conformity with written information furnished by or on behalf of Holder expressly for use in connection with such registration; and Holder will reimburse any legal or other expenses reasonably incurred by the Partnership or any such director, officer, controlling person, agent or underwriter or controlling person, or other person selling securities in such registration or any of its officers, directors, partners, agents, employees, or controlling persons in connection with investigating or defending any such loss, claim, damage, liability, or action; provided , however , that the liability of Holder hereunder shall be limited to the amount of proceeds received by Holder in the offering giving rise to the Violation; and provided further that the indemnity agreement contained in this subsection 1.9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of Holder, which consent shall not be unreasonable withheld nor, in the case of a sale directly by the Partnership of its securities (including a sale of such securities through any underwriter retained by the Partnership to engage in a distribution solely on behalf of the Partnership), shall Holder be liable to the Partnership in any case in which such untrue statement or alleged untrue statement or omission or alleged omission was contained in a preliminary prospectus and corrected in a final or amended prospectus, and the Partnership failed to deliver a copy of the final or amended prospectus at or prior to the confirmation of the sale of the securities to the person asserting any such loss, claim, damage or liability in any case where such delivery is required by the 1933 Act.
(c) Promptly after receipt by an indemnified party under this Section 1.9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 1.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume and control the defense thereof with counsel mutually satisfactory to the parties; provided , however , that, if representation of such indemnified party by counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented in such proceeding, then (i) if such indemnified party is Holder or any Affiliate of Holder, Holder and any Affiliate of Holder shall have the right to retain one counsel to represent Holder and any Affiliates of Holder, with fees and expenses to be paid by the indemnifying party and (ii) all other indemnified parties shall have the right to select one counsel to represent such indemnified parties, with fees and expenses to be paid by the indemnifying party. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 1.9 to the extent of such prejudice, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 1.9.
(d) The obligations of the Partnership and Holder under this section 1.9 shall survive the completion of any offering of Registrable Securities in a registration statement whether under this Section 1 or otherwise.
7
1.10. Reports Under Securities Exchange Act of 1934 . With a view to making available to Holder the benefits of Rule 144 promulgated under the 1933 Act and any other rule or regulation of the Commission that may at any time permit Holder to sell securities of the Partnership to the public without registration, and with a view to making it possible for Holder to register the Registrable Securities pursuant to a registration on Form S-3, the Partnership agrees to:
(a) make and keep public information available, as those terms are understood and defined in Rule 144, at all times;
(b) take such action, including the voluntary registration of its securities under Section 12 of the 1934 Act, as is necessary to enable Holder to utilize Form S-3 for the sale of its Registrable Securities, such action to be taken as soon as practicable (but not later than 90 days) after the end of the fiscal year in which the first registration statement filed by the Partnership for the offering of its securities to the general public is declared effective;
(c) file with the Commission in a timely manner all reports and other documents required of the Partnership under the 1933 Act and the 1934 Act; and
(d) furnish to Holder so long as it owns any Registrable Securities, forthwith upon request (i) a written statement by the Partnership that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Partnership and such other reports and documents so filed by the Partnership, and (iii) such other information as may be reasonably requested in availing Holder of any rule or regulation of the Commission which permits the selling of any such securities without registration or pursuant to such form.
2. Miscellaneous .
2.1. Parties in Interest . All covenants, agreements, representations, warranties and undertakings in this Agreement made by and on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not.
2.2. Amendments and Waivers . Except as set forth in this Agreement, changes in or additions to this Agreement may be made or compliance with any term, covenant, agreement, condition or provision set forth herein may be omitted or waived (either generally or in a particular instance and either retroactively or prospectively), upon the written consent of the Partnership and Holder.
2.3. Governing Law . This Agreement shall be deemed a contract made under the laws of the State of New York and, together with the rights of obligations of the parties hereunder, shall be construed under and governed by the laws of the State of New York.
2.4. Notices . All notices, requests, demands and other communications provided for
8
hereunder shall be in writing (including telegraphic communication) and mailed, telecopied, telegraphed or delivered:
If to Holder:
|
American Property Investors, Inc. | |
|
90 South Bedford Road | |
|
Mt. Kisco, New York 10549 |
If to the Partnership to:
|
American Property Investors, Inc. | |
|
90 South Bedford Road | |
|
Mt. Kisco, New York 10549 |
If to either party, with a copy to:
|
Marc Weitzen, Esq. | |
|
Gordon Altman Butowsky Weitzen | |
|
Shalov & Wein | |
|
114 W. 47th Street | |
|
New York, New York 10036 |
or at such other address as shall be designated by any party in a written notice to the other parties complying as to delivery with the terms of this Section 2.4.
All such notices, requests, demands and other communications shall, when mailed (registered mail, return receipt requested, postage prepaid), personally delivered, or telegraphed, be effective four days after deposit in the mails, when personally delivered, or when delivered to the telegraph Partnership, respectively, addressed as aforesaid, unless otherwise provided herein and, when telecopied, shall be effective upon actual receipt.
2.5. Counterparts . This Agreement may be executed in counterparts, all of which together shall constitute one and the same instrument.
2.6. Effect of Headings . The section and paragraph headings herein are for convenience only and shall not affect the construction hereof.
2.7. Entire Agreement . This Agreement constitutes the entire agreement among the Partnership and Holder with respect to the subject matter hereof. There are no representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein. This Agreement supersedes all prior agreements between the parties with respect to the Registrable Securities described herein and the subject matter hereof.
2.8. Severability . The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first above
9
written, by the parties hereto.
|
AMERICAN REAL ESTATE PARTNERS, L.P. | |||
|
By: | American Property Investors, Inc., | ||
|
General Partner | |||
|
||||
|
|
|||
|
Name: | |||
|
Title: | |||
|
||||
|
X LIMITED PARTNERSHIP | |||
|
By: | American Property Investors, Inc., | ||
|
General Partner | |||
|
||||
|
|
|||
|
Name: | |||
|
Title: |
10
Exhibit 12
AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
(AMOUNTS IN THOUSANDS)
Years Ended December 31,
2004
2003
2002
2001
2000
$
96,129
$
60,145
$
74,923
$
71,169
$
77,502
$
46,099
$
21,103
$
27,297
$
36,577
$
20,057
$
2,400
$
320
$
191
$
178
$
222
$
128
$
122
$
124
$
103
$
100
$
144,756
$
81,690
$
102,535
$
108,027
$
97,881
$
46,099
$
21,103
$
27,297
$
36,577
$
20,057
$
2,400
$
320
$
191
$
178
$
222
$
128
$
122
$
124
$
103
$
100
$
48,627
$
21,545
$
27,612
$
36,858
$
20,379
3.0
3.8
3.7
2.9
4.8
Exhibit 21
Subsidiaries of Registrant
Set forth below is a list of subsidiaries of American Real Estate Partners, L.P. All other
subsidiaries, if considered in the aggregate as a single subsidiary, would not constitute a
significant subsidiary.
Entity
Jurisdiction of Formation
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Nevada
Delaware
Delaware
Delaware
Nevada
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; | |
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) evaluated the effectiveness of the Registrants disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and | |
d) disclosed in this Report any changes in the Registrants internal control over financial reporting that occurred during the Registrants most recent fiscal quarter (the Registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting. |
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrants ability to record, process, summarize and report financial information; and |
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal control over financial reporting. |
/s/ Keith A. Meister | |
|
|
Keith A. Meister | |
President and Chief Executive Officer of | |
American Property Investors, Inc., | |
the General Partner of | |
American Real Estate Partners, L.P. |
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; | |
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) evaluated the effectiveness of the Registrants disclosure controls and procedures and presented in the Report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and | |
d) disclosed in the Report any changes in the Registrants internal control over financial reporting that occurred during the Registrants most recent fiscal quarter (the Registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting. |
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrants ability to record, process, summarize and report financial information; and |
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal control over financial reporting. |
/s/ John P. Saldarelli | |
|
|
John P. Saldarelli | |
Vice President and Chief Financial Officer of | |
American Property Investors, Inc., | |
the General Partner of | |
American Real Estate Partners, L.P. |
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | |
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
/s/ Keith A. Meister | |
|
|
Keith A. Meister | |
President and Chief Executive Officer of | |
American Property Investors, Inc., | |
the General Partner of | |
American Real Estate Partners, L.P. |
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and | |
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
/s/ John P. Saldarelli | |
|
|
John P. Saldarelli | |
Vice President and Chief Financial Officer of | |
American Property Investors, Inc., | |
the General Partner of | |
American Real Estate Partners, L.P. |