(Mark One) | ||
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005 | ||
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, NY
(Address of principal executive offices) |
10549
(Zip Code) |
1
Three Months Ended June 30,
2005
2004
(In $000s, except per unit data)
(Unaudited)
(Restated)
$
122,432
$
118,588
73,378
21,911
24,845
19,772
220,655
160,271
105,507
105,801
41,473
25,216
20,146
11,989
1,872
1,424
3,362
414
172,360
144,844
48,295
15,427
(28,330
)
(14,724
)
16,115
17,447
(20,880
)
7,061
15,200
25,211
(9,029
)
(3,944
)
6,171
21,267
187
1,648
2,644
48,257
2,831
49,905
$
9,002
$
71,172
$
(9,636
)
$
76,012
18,638
(4,840
)
$
9,002
$
71,172
$
(0.27
)
$
0.59
0.06
1.06
$
(0.21
)
$
1.65
46,271,455
46,098,284
$
(0.27
)
$
0.55
0.06
0.94
$
(0.21
)
$
1.49
50,176,449
51,938,033
2
Six Months Ended June 30,
2005
2004
(In $000s, except per unit data)
(Unaudited)
(Restated)
$
245,235
$
234,940
89,071
63,032
42,688
30,948
376,994
328,920
209,579
206,497
78,671
52,279
35,841
19,564
5,624
2,763
3,362
414
333,077
281,517
43,917
47,403
(51,453
)
(25,271
)
32,873
23,967
1,504
41,924
26,841
88,023
(12,436
)
(10,176
)
14,405
77,847
1,144
4,633
21,367
55,186
22,511
59,819
$
36,916
$
137,666
$
38,173
$
130,633
(1,257
)
7,033
$
36,916
$
137,666
$
0.35
$
1.56
0.48
1.27
$
0.83
$
2.83
46,185,348
46,098,284
$
0.35
$
1.43
0.44
1.12
$
0.79
$
2.55
49,973,982
52,218,668
3
General
Limited Partners
Partners
Equity
Held in Treasury
Total
Equity
Depositary
Partners
(Deficit)
Units(ii)
Amounts
Units
Equity
(In $000s)
(Unaudited)
$
310,295
$
1,361,392
$
(11,921
)
1,137
$
1,659,766
(1,257
)
38,173
36,916
(113
)
(5,545
)
(5,658
)
(1,370
)
32,628
31,258
9,279
9,279
(616,553
)
444,998
(171,555
)
(23,295
)
12,000
(11,295
)
$
(321,644
)
$
1,851,018
$
(11,921
)
1,137
$
1,517,453
(i) | Deferred tax assets and liabilities of $2.6 million, and $6.7 million respectively, have been eliminated through adjustments to general partners equity. |
(ii) | Includes $457.0 million of Limited Partner Unit issuance on June 30, 2005 in connection with acquisitions. |
4
Six Months Ended June 30,
2005
2004
(In $000s)
(Unaudited)
(Restated)
$
14,405
$
77,847
69,163
54,255
2,636
2,450
(176
)
(5,821
)
498
(31
)
(7,178
)
(37,167
)
175
6,798
(1,019
)
(1,019
)
8,595
6,235
(1,547
)
(742
)
3,680
2,181
21,480
(323
)
15,815
15,147
(447
)
(19,638
)
2,809
128,834
100,227
22,511
59,819
176
952
(21,367
)
(55,186
)
1,320
5,585
130,154
105,812
39,347
26,212
4,639
16,635
1,771
2,168
(91,803
)
(54,775
)
(45,151
)
(134,014
)
(43,990
)
(125,900
)
(14,583
)
(10,567
)
(17,454
)
(387
)
(299
)
39,732
(51,568
)
86,507
(180,000
)
(140
)
(2,184
)
(376,573
)
(179,231
)
41,438
101,452
(335,135
)
(77,779
)
5
Six Months Ended June 30,
2005
2004
(In $000s)
(Unaudited)
(Restated)
(17,916
)
9,279
15,894
62,100
480,000
565,409
4,425
10,000
(2,932
)
(5,858
)
(16,342
)
(25,000
)
(8,587
)
(397
)
527,943
542,132
322,962
570,165
806,309
564,221
$
1,129,271
$
1,134,386
$
24,667
$
16,973
$
3,017
$
$
(7,387
)
$
(24,849
)
(6,428
)
4,154
31,277
3,591
(358
)
$
$
$
(5,657
)
$
349
$
$
59,853
$
29,500
$
$
456,998
$
$
4,105
$
12,721
$
$
6,906
6
1. | General |
Change in Reporting Entity |
Stock Options |
7
Investments |
Filing Status of Subsidiaries |
2. | Related Party Transactions |
a. Acquisitions |
| TransTexas Gas Corporation (TransTexas), | |
| NEG Holding LLC (NEG Holdings), | |
| Panaco, Inc. (Panaco), | |
| GB Holdings, Inc. (GBH), and | |
| Atlantic Coast Entertainment Holdings, Inc. (Atlantic Holdings). |
8
9
Summary Financial Data for the Acquired Entities
Six Months Ended June 30,
2005
2004
Operating
Operating
Total
Income
Net Income
Total
Income
Net Income
Revenues
(Loss)
(Loss)
Revenues
(Loss)
(Loss)
(In $000s)
$
26,049
$
(2,440
)
$
(1,416
)
$
30,225
$
481
$
2,280
23,735
1,102
26
(1)
39,287
11,468
9,245
32,806
9,973
9,025
(2)
80,888
(6,202
)
(6,932
)
86,571
(1,267
)
(2,322
)(3)
$
169,959
$
3,928
$
923
$
149,602
$
9,187
$
8,983
(1) | Panaco is not presented for the six months ended June 30, 2004 as it was not under common control during that period. |
(2) | We recorded net income of $9,893,000 and $8,219,000, on the accretion method with respect to NEG, in the first three months of 2005 and the first six months of 2004, respectively. |
(3) | We recorded net loss of $986,000 and $215,000, on the equity method for GBH/ Atlantic Holdings, in the first three months of 2005 and the first six months of 2004, respectively. |
b. Administrative Services |
10
c. Securities Ownership |
3. | Oil and Gas Accounting Policies and Disclosures |
Oil and Natural Gas Properties |
11
Revenue and Expense Recognition |
Oil and Gas Derivatives |
Income Taxes |
Accounting for Asset Retirement Obligations |
12
Other Disclosure Data |
Capitalized Costs |
Proved properties
|
$ | 923,094 | |||
Other property and equipment
|
5,595 | ||||
Total
|
928,689 | ||||
Less: Accumulated depreciation, depletion and amortization
|
(401,305 | ) | |||
$ | 527,384 | ||||
Acquisitions
|
$ | 128,673 | |||
Exploration costs
|
52,765 | ||||
Development costs
|
62,209 | ||||
Total
|
$ | 243,647 | |||
Depletion rate per MCFe
|
$ | 2.28 | |||
Supplemental Reserve Information (Unaudited) |
13
Oil and
Condensate
(Barrels)
Gas (mcf)
8,165,562
206,259,821
204,272
9,810,665
5,203,599
25,981,749
524,089
50,226,279
(15,643
)
(344,271
)
(1,484,005
)
(18,895,077
)
12,597,874
273,039,166
6,852,118
125,765,372
8,955,300
151,451,558
(1) | Includes proved developed non-producing reserves as of December 31, 2004 of 1,880,771 barrels of oil and 37,206,946 mcf of gas |
Standardized Measure Information |
14
(In $000s)
$
620,497
(1,375
)
(130,640
)
16,686
(96,236
)
75,239
193,022
31,730
62,050
307
$
771,280
Receivables |
Recently Issued Pronouncements |
15
4. | Unit Options |
Risk-free interest rate
|
3.5% | |||
Volatility
|
30.0% | |||
Dividend yield
|
0% | |||
Expected life
|
7-8 years |
5. | Operating Units |
a. Gaming |
16
June 30,
December 31,
2005
2004
(In $000s)
(Unaudited)
$
145,876
$
120,499
455,812
461,000
63,915
74,011
$
665,603
$
655,510
$
60,392
$
60,425
255,935
284,989
10,546
10,746
338,730
299,350
$
665,603
$
655,510
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||
(In $000s) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Revenues
|
||||||||||||||||||
Casino
|
$ | 81,168 | $ | 80,911 | $ | 166,238 | $ | 161,622 | ||||||||||
Hotel
|
18,602 | 16,615 | 36,689 | 32,791 | ||||||||||||||
Food and beverage
|
23,307 | 22,519 | 45,249 | 44,210 | ||||||||||||||
Tower, retail and other income
|
10,105 | 10,282 | 19,118 | 19,538 | ||||||||||||||
Gross revenues
|
133,182 | 130,327 | 267,294 | 258,161 | ||||||||||||||
Less promotional allowances
|
10,750 | 11,739 | 22,059 | 23,221 | ||||||||||||||
Net revenues
|
122,432 | 118,588 | 245,235 | 234,940 | ||||||||||||||
Expenses
|
||||||||||||||||||
Casino
|
27,596 | 28,423 | 55,322 | 56,333 | ||||||||||||||
Hotel
|
8,033 | 6,674 | 14,759 | 12,925 | ||||||||||||||
Food and beverage
|
14,842 | 14,111 | 28,784 | 27,758 | ||||||||||||||
Tower, retail and other
|
4,324 | 3,626 | 8,171 | 6,980 | ||||||||||||||
Selling, general and administrative
|
41,352 | 42,519 | 83,963 | 82,097 | ||||||||||||||
Depreciation and amortization
|
9,360 | 10,448 | 18,580 | 20,404 | ||||||||||||||
105,507 | 105,801 | 209,579 | 206,497 | |||||||||||||||
Operating income
|
$ | 16,925 | $ | 12,787 | $ | 35,656 | $ | 28,443 | ||||||||||
b. Oil and Gas |
17
June 30,
December 31,
2005
2004
(In $000s)
(Unaudited)
$
101,272
$
81,748
604,685
527,384
41,690
50,067
$
747,647
$
659,199
$
75,881
$
63,148
171,495
336,933
247,376
400,081
500,271
259,118
$
747,647
$
659,199
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
(In $000s) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Revenues
|
$ | 73,378 | $ | 21,911 | $ | 89,071 | $ | 63,032 | |||||||||
Cost and expenses:
|
|||||||||||||||||
Oil and gas operating expenses
|
11,524 | 7,467 | 23,951 | 15,293 | |||||||||||||
Depreciation, depletion and amortization
|
25,348 | 14,610 | 46,776 | 31,111 | |||||||||||||
General and administrative expenses
|
4,601 | 3,139 | 7,944 | 5,875 | |||||||||||||
Total expenses
|
41,473 | 25,216 | 78,671 | 52,279 | |||||||||||||
Operating income (loss)
|
$ | 31,905 | $ | (3,305 | ) | $ | 10,400 | $ | 10,753 | ||||||||
18
c. Real Estate |
June 30, | December 31, | ||||||||
2005 | 2004 | ||||||||
(In $000s) | |||||||||
(Unaudited) | |||||||||
Rental properties
|
|||||||||
Finance leases, net
|
$ | 75,158 | $ | 85,281 | |||||
Operating leases
|
43,484 | 49,118 | |||||||
Property development
|
102,857 | 106,537 | |||||||
Resort properties
|
46,354 | 50,132 | |||||||
Total real estate
|
$ | 267,853 | $ | 291,068 | |||||
19
Three Months Ended
Six Months Ended
June 30,
June 30,
2005
2004
2005
2004
(In $000s)
(Unaudited)
$
1,801
$
2,490
$
3,767
$
5,426
1,982
1,901
4,017
3,792
14,459
12,443
22,738
17,457
6,603
2,938
12,166
4,273
24,845
19,772
42,688
30,948
$
1,404
$
1,417
$
3,456
$
3,564
11,310
7,705
18,357
11,063
7,432
2,867
14,028
4,937
20,146
11,989
35,841
19,564
$
4,699
$
7,783
$
6,847
$
11,384
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In $000s, except unit data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Properties sold
|
7 | 25 | 11 | 33 | ||||||||||||
Proceeds received
|
$ | 4,856 | 99,349 | $ | 37,608 | 118,087 | ||||||||||
Mortgage debt
|
| | 10,702 | 93,845 | ||||||||||||
Total gain recorded
|
2,644 | 48,032 | 15,834 | 61,007 | ||||||||||||
Gain (loss) recorded in operations
|
$ | | 225 | $ | (176 | ) | (5,821 | ) | ||||||||
Gain recorded in discontinued operations(i)
|
2,644 | 48,257 | 15,658 | 55,186 |
(i) | A gain of $5.7 million on the sale of resort properties was recognized in the three months ended March 31, 2005 in addition to gains on the rental portfolio. |
6. | Investments |
Trading Securities |
20
Available for sale
June 30, 2005
December 31, 2004
Amortized
Carrying
Amortized
Carrying
Cost
Value
Cost
Value
(Unaudited)
$
57,598
$
57,598
$
96,840
$
96,840
51,669
46,031
2,248
2,248
$
109,267
$
103,629
$
99,088
$
99,088
$
5,000
$
5,000
$
5,491
$
5,491
205,850
205,850
205,850
205,850
752
752
40,098
40,098
$
211,602
$
211,602
$
251,439
$
251,439
7. | Trade, Notes and Other Receivables |
8. | Property, Plant and Equipment |
June 30, 2005 | December 31, 2004 | |||||||||||||||||||||||
Accumulated | Accumulated | |||||||||||||||||||||||
Depletion/ | Depletion/ | |||||||||||||||||||||||
Cost | Depreciation | Net | Cost | Depreciation | Net | |||||||||||||||||||
(In $000s) | ||||||||||||||||||||||||
Oil and Gas
|
$ | 1,050,799 | $ | (446,114 | ) | $ | 604,685 | $ | 928,689 | $ | (401,305 | ) | $ | 527,384 | ||||||||||
Gaming
|
615,019 | (159,207 | ) | 455,812 | 602,673 | (141,673 | ) | 461,000 | ||||||||||||||||
Real Estate
|
294,678 | (26,825 | ) | 267,853 | 311,230 | (20,162 | ) | 291,068 | ||||||||||||||||
Total P,P&E
|
$ | 1,960,496 | $ | (632,146 | ) | $ | 1,328,350 | $ | 1,842,592 | $ | (563,140 | ) | $ | 1,279,452 | ||||||||||
9. | Other Current and Non-Current Assets |
21
June 30,
December 31,
2005
2004
(In $000s)
$
54,147
$
56,416
27,257
38,912
21,260
23,519
22,530
6,714
$
125,194
$
125,561
10. | Other Non-Current Liabilities |
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
(In $000s) | ||||||||
Long-term liabilities
|
$ | 82,444 | $ | 92,789 | ||||
Minority interest
|
26,594 | 17,740 | ||||||
Other
|
2,444 | | ||||||
$ | 111,482 | $ | 110,529 | |||||
11. | Current Portion of Long-Term Debt |
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
(In $000s) | ||||||||
GBH 11% Notes
|
$ | 43,741 | $ | 43,741 | ||||
Mortgages payable
|
23,765 | 31,177 | ||||||
Other
|
2,656 | 1,761 | ||||||
$ | 70,162 | $ | 76,679 | |||||
GBH 11% Notes |
22
12.
Long Term Debt
June 30,
December 31,
2005
2004
(In $000s)
$
480,000
$
350,760
350,598
215,000
215,000
110,934
51,834
83,649
91,896
4,298
4,977
1,244,641
714,305
23,765
31,177
$
1,220,876
$
683,128
Senior Unsecured 7.125% Notes Due 2013 |
Borrowings Under Credit Facility |
23
13. | Other Income (Expense) |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In $000s) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Net gains (losses) on marketable securities
|
$ | (21,324 | ) | $ | 8,310 | $ | 380 | $ | 37,167 | |||||||
Minority interest
|
616 | 75 | 1,547 | 744 | ||||||||||||
Gain on sale or disposition of real estate
|
(10 | ) | (225 | ) | 176 | 5,821 | ||||||||||
Other
|
(162 | ) | (1,099 | ) | (599 | ) | (1,808 | ) | ||||||||
$ | (20,880 | ) | $ | 7,061 | $ | 1,504 | $ | 41,924 | ||||||||
14. | Preferred Units |
24
15. | Earnings Per Limited Partnership Unit |
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
(In $000s, except per unit data) | |||||||||||||||||
Attributable to Limited Partners:
|
|||||||||||||||||
Basic income (loss) from continuing operations
|
$ | (12,411 | ) | $ | 27,100 | $ | 16,110 | $ | 72,004 | ||||||||
Add Preferred LP Unit distribution
|
1,323 | 1,260 | 2,583 | 2,461 | |||||||||||||
Income (loss) before discontinued operations
|
(11,088 | ) | 28,360 | 18,693 | 74,465 | ||||||||||||
Income from discontinued operations
|
2,775 | 48,912 | 22,063 | 58,629 | |||||||||||||
Diluted earnings (loss)
|
$ | (8,313 | ) | $ | 77,272 | $ | 40,756 | $ | 133,094 | ||||||||
Weighted average limited partnership units outstanding
|
46,271,455 | 46,098,284 | 46,185,348 | 46,098,284 | |||||||||||||
Dilutive effect of redemption of Preferred LP Units
|
3,904,994 | 5,839,749 | 3,788,634 | 6,120,384 | |||||||||||||
Weighted average limited partnership units and equivalent
partnership units outstanding
|
50,176,449 | 51,938,033 | 49,973,982 | 52,218,668 | |||||||||||||
Basic earnings:
|
|||||||||||||||||
Income (loss) from continuing operations
|
$ | (0.27 | ) | $ | 0.59 | $ | 0.35 | $ | 1.56 | ||||||||
Income (loss) from discontinued operations
|
0.06 | 1.06 | 0.48 | 1.27 | |||||||||||||
Basic earnings (loss) per LP unit
|
$ | (0.21 | ) | $ | 1.65 | $ | 0.83 | $ | 2.83 | ||||||||
Diluted earnings:(i)
|
|||||||||||||||||
Income (loss) from continuing operations
|
$ | (0.27 | ) | $ | 0.55 | $ | 0.35 | $ | 1.43 | ||||||||
Income (loss) from discontinued operations
|
0.06 | 0.94 | 0.44 | 1.12 | |||||||||||||
Diluted earnings (loss) per LP unit
|
$ | (0.21 | ) | $ | 1.49 | $ | 0.79 | $ | 2.55 | ||||||||
(i) | The computation of diluted earnings per LP unit for the three months ended June 30, 2005 excludes the impact of the redemption of the Preferred LP units as the impact of the redemption would have been anti-dilutive. |
16. | Asset Retirement Obligations |
25
June 30,
December 31,
2005
2004
(In $000s):
$
56,524
$
6,746
1,620
593
49,538
(16,758
)
(353
)
$
41,386
$
56,524
17. | Oil and Gas Derivatives |
Type of Contract | Production Month | Volume per Month | Floor | Ceiling | ||||||||||||
No cost collars
|
Jan-Dec 2005 | 40,000 Bbls | $ | 42.50 | $ | 46.00 | ||||||||||
No cost collars
|
March-Dec 2005 | 14,000 Bbls | 44.50 | 48.00 | ||||||||||||
No cost collars
|
Jan-Dec 2005 | 25,000 Bbls | 43.60 | 45.80 | ||||||||||||
No cost collars
|
March-Dec 2005 | 250,000 MMBTU | 6.05 | 7.30 | ||||||||||||
No cost collars
|
Jan-Dec 2005 | 550,000 MMBTU | 6.00 | 8.35 | ||||||||||||
No cost collars
|
Jan-Dec 2005 | 300,000 MMBTU | 3.25 | 4.60 | ||||||||||||
No cost collars
|
Jan-Dec 2005 | 300,000 MMBTU | 4.75 | 5.45 | ||||||||||||
No cost collars
|
Jan-Dec 2005 | 250,000 MMBTU | 6.00 | 8.70 | ||||||||||||
No cost collars
|
Jan-Dec 2006 | 31,000 Bbls | 41.65 | 45.25 | ||||||||||||
No cost collars
|
Jan-Dec 2006 | 16,000 Bbls | 41.75 | 45.40 | ||||||||||||
No cost collars
|
Jan-Dec 2006 | 570,000 MMBTU | 6.00 | 7.25 | ||||||||||||
No cost collars
|
Jan-Dec 2006 | 120,000 MMBTU | 6.00 | 7.28 | ||||||||||||
No cost collars
|
Jan-Dec 2006 | 500,000 MMBTU | 4.50 | 5.00 |
26
Three Months Ended
Six Months Ended
June 30,
June 30,
2005
2004
2005
2004
(In $000s)
$
4,835
$
3,939
$
7,967
$
3,866
(6,936
)
14,456
31,833
13,817
$
(2,101
)
$
18,395
$
39,800
$
17,683
18. | Segment Reporting |
27
Three Months Ended
Six Months Ended
June 30,
June 30,
2005
2004
2005
2004
(In $000s)
$
73,378
$
21,911
$
89,071
$
63,032
122,432
118,588
245,235
234,940
14,459
12,443
22,738
17,457
3,783
4,391
7,784
9,218
6,603
2,938
12,166
4,273
24,845
19,772
42,688
30,948
$
220,655
$
160,271
$
376,994
$
328,920
$
31,905
$
(3,305
)
$
10,400
$
10,753
16,925
12,787
35,656
28,443
3,149
4,738
4,381
6,394
2,379
2,974
4,328
5,654
(829
)
71
(1,862
)
(664
)
4,699
7,783
6,847
11,384
53,529
17,265
52,903
50,580
(5,234
)
(1,838
)
(8,986
)
(3,177
)
48,295
15,427
43,917
47,403
(28,330
)
(14,724
)
(51,453
)
(25,271
)
16,115
17,447
32,873
23,967
(20,880
)
7,061
1,504
41,924
(9,029
)
(3,944
)
(12,436
)
(10,176
)
$
6,171
$
21,267
$
14,405
$
77,847
$
25,348
$
14,610
$
46,776
$
31,111
9,360
10,448
18,580
20,404
410
521
1,030
1,280
870
630
1,738
1,277
1,280
1,151
2,768
2,557
35,988
26,209
68,124
54,072
566
127
1,039
183
$
36,554
$
26,336
$
69,163
$
54,255
i) | Holding company costs include general and administrative expenses and acquisition costs of the holding company. General and administrative expenses of the segments are included in their respective operating expenses in the accompanying statements of earnings. |
28
June 30,
December 31,
2005
2004
(In $000s)
$
604,685
$
527,384
455,812
461,000
267,853
291,068
$
1,328,352
$
1,279,452
19. | Income Taxes |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In $000s) | ||||||||||||||||
Current
|
$ | (2,487 | ) | $ | 980 | $ | (3,841 | ) | $ | (3,941 | ) | |||||
Deferred
|
(6,542 | ) | (4,924 | ) | (8,595 | ) | (6,235 | ) | ||||||||
$ | (9,029 | ) | $ | (3,944 | ) | $ | (12,436 | ) | $ | (10,176 | ) | |||||
June 30, | December 31, | |||||||||
2005 | 2004 | |||||||||
(In $000s) | ||||||||||
(Unaudited) | ||||||||||
Deferred tax assets:
|
||||||||||
Depreciation
|
$ | 20,383 | $ | 16,871 | ||||||
Net operating loss carryforwards
|
54,263 | 90,490 | ||||||||
Investment in NEG Holding LLC
|
(450 | ) | 5,333 | |||||||
Other
|
24,631 | 36,940 | ||||||||
98,827 | 149,634 | |||||||||
Valuation allowance
|
(41,995 | ) | (88,590 | ) | ||||||
Sub-total
|
56,832 | 61,044 | ||||||||
Less current portion
|
(2,685 | ) | (4,628 | ) | ||||||
Long-term deferred tax assets
|
$ | 54,147 | $ | 56,416 | ||||||
29
20. | Commitments and Contingencies |
21. | Subsequent Events |
Securities |
WestPoint Stevens Acquisition |
30
Offer to Acquire Remaining Shares in National Energy Group (NEG) |
31
ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
1. | Overview |
2. | Results of Operations |
| Consolidated Financial Results | |
| Gaming | |
| Oil and Gas | |
| Real Estate | |
| Corporate and Investments |
3. | Liquidity and Capital Resources |
| Consolidated Financial Results | |
| Gaming | |
| Oil and Gas | |
| Real Estate |
Consolidated Financial Results |
Three months ended June 30, 2005 compared to three months ended June 30, 2004 |
| Increased operating income from oil and gas activities reflecting higher prices for oil and gas, and higher production volumes and reduced derivative losses. On a reported basis, operating income from oil and gas activities in the second quarter of 2005 was $35.2 million higher than operating income from oil and gas activities for the same period in the prior year. | |
| Higher interest expense in the current year as a result of higher debt levels. On a reported basis, interest expense increased approximately $13.6 million. |
32
| Losses on marketable securities. Net losses on securities were $21.3 million in the current year versus net gains of $8.3 million in the prior year. | |
| Reduced gains on sales of properties. On a reported basis, income from gains on discontinued operations fell $47.1 million. |
Six months ended June 30, 2005 compared to six months ended June 30, 2004 |
| Reduction in gains on securities. Net gains on securities were $.4 million in the current year versus $37.2 million in the prior year. | |
| Higher interest expense in the current year as a result of higher debt levels. Interest expense increased approximately $26.2 million but is offset by an increase in interest and other income of $8.9 million. | |
| Increased operating income from gaming. On a reported basis, operating income in the six months ended June 30, 2005 was $7.2 million higher than the same period in the prior year. |
Three months ended June 30, 2005 compared to three months ended June 30, 2004 |
Six months ended June 30, 2005 compared to six months ended June 30, 2004 |
33
Gaming |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In $000s, except per unit data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Restated) | (Restated) | |||||||||||||||
Revenues
|
||||||||||||||||
Casino
|
$ | 81,168 | $ | 80,911 | $ | 166,238 | $ | 161,622 | ||||||||
Hotel
|
18,602 | 16,615 | 36,689 | 32,791 | ||||||||||||
Food and beverage
|
23,307 | 22,519 | 45,249 | 44,210 | ||||||||||||
Tower, retail and other income
|
10,105 | 10,282 | 19,118 | 19,538 | ||||||||||||
Gross revenues
|
133,182 | 130,327 | 267,294 | 258,161 | ||||||||||||
Less promotional allowances
|
10,750 | 11,739 | 22,059 | 23,221 | ||||||||||||
Net revenues
|
122,432 | 118,588 | 245,235 | 234,940 | ||||||||||||
Expenses
|
||||||||||||||||
Casino
|
27,596 | 28,423 | 55,322 | 56,333 | ||||||||||||
Hotel
|
8,033 | 6,674 | 14,759 | 12,925 | ||||||||||||
Food and beverage
|
14,842 | 14,111 | 28,784 | 27,758 | ||||||||||||
Tower, retail and other
|
4,324 | 3,626 | 8,171 | 6,980 | ||||||||||||
Selling, general and administrative
|
41,352 | 42,519 | 83,963 | 82,097 | ||||||||||||
Depreciation and amortization
|
9,360 | 10,448 | 18,580 | 20,404 | ||||||||||||
105,507 | 105,801 | 209,579 | 206,497 | |||||||||||||
Operating income
|
$ | 16,925 | $ | 12,787 | $ | 35,656 | $ | 28,443 | ||||||||
Operating income %
|
13.8 | % | 10.8 | % | 14.5 | % | 12.1 | % |
Three months ended June 30, 2005 compared to the three months ended June 30, 2004 |
34
Six months ended June 30, 2005 compared to Six months ended June 30, 2004 |
35
Results by Location |
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
Net revenues
|
|||||||||||||||||
Las Vegas
|
$ | 81,509 | $ | 73,360 | $ | 164,437 | $ | 148,369 | |||||||||
Atlantic City
|
40,923 | 45,228 | 80,798 | 86,571 | |||||||||||||
Total gaming
|
$ | 122,432 | $ | 118,588 | $ | 245,235 | $ | 234,940 | |||||||||
Operating income
|
|||||||||||||||||
Las Vegas
|
$ | 17,507 | $ | 11,045 | $ | 37,297 | $ | 25,924 | |||||||||
Atlantic City
|
(674 | ) | 1,938 | (2,138 | ) | 2,878 | |||||||||||
Other
|
92 | (196 | ) | 497 | (359 | ) | |||||||||||
Total gaming
|
$ | 16,925 | $ | 12,787 | $ | 35,656 | $ | 28,443 | |||||||||
36
Oil and Gas |
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
(In $000s) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(Restated) | (Restated) | ||||||||||||||||
Revenues
|
$ | 73,378 | $ | 21,911 | $ | 89,071 | $ | 63,032 | |||||||||
Cost and expenses:
|
|||||||||||||||||
Oil and gas operating expenses
|
11,524 | 7,467 | 23,951 | 15,293 | |||||||||||||
Depreciation, depletion and amortization
|
25,348 | 14,610 | 46,776 | 31,111 | |||||||||||||
General and administrative expenses
|
4,601 | 3,139 | 7,944 | 5,875 | |||||||||||||
41,473 | 25,216 | 78,671 | 52,279 | ||||||||||||||
Operating income
|
$ | 31,905 | $ | (3,305 | ) | $ | 10,400 | $ | 10,753 | ||||||||
Operating income %
|
43.5 | % | (15.1 | )% | 11.7 | % | 17.1 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
Gross oil and gas revenue
|
$ | 71,277 | $ | 40,306 | $ | 128,871 | $ | 80,715 | |||||||||
Realized derivative losses
|
(4,835 | ) | (3,939 | ) | (7,967 | ) | (3,866 | ) | |||||||||
Unrealized derivative gains (losses)
|
6,936 | (14,456 | ) | (31,833 | ) | (13,817 | ) | ||||||||||
Revenues
|
$ | 73,378 | $ | 21,911 | $ | 89,071 | $ | 63,032 | |||||||||
37
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Production data:
|
||||||||||||||||
Oil (Mbbls)
|
392 | 242 | 731 | 511 | ||||||||||||
Natural gas (MMcf)
|
7,068 | 4,437 | 12,993 | 9,426 | ||||||||||||
Natural gas liquids (Mbbls)
|
95 | 185 | 186 | 326 | ||||||||||||
Natural gas equivalents (Mmcfe)
|
9,991 | 6,999 | 18,492 | 14,446 | ||||||||||||
Average Sales Price:
|
||||||||||||||||
Oil (per Bbl)
|
$ | 47.50 | $ | 31.06 | $ | 47.88 | $ | 30.93 | ||||||||
Natural gas (per Mcf)
|
6.32 | 5.41 | 5.95 | 5.51 | ||||||||||||
Natural gas liquids (per Bbl)
|
29.93 | 22.50 | 30.17 | 23.44 | ||||||||||||
Natural gas Equivalents (per Mcfe)
|
6.62 | 5.10 | 6.38 | 5.22 | ||||||||||||
Expense per Mcfe:
|
||||||||||||||||
Oil and gas operating expenses
|
$ | 1.15 | $ | 1.07 | $ | 1.30 | $ | 1.06 | ||||||||
Depreciation, depletion and amortization
|
2.54 | 2.09 | 2.53 | 2.15 | ||||||||||||
General and administrative expenses
|
0.46 | 0.45 | 0.43 | 0.41 |
Three months ended June 30, 2005 compared to June 30, 2004 |
38
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
(In $000s) | |||||||||||||||||
Realized loss (cash payments)
|
$ | 4,835 | $ | 3,939 | $ | 7,967 | $ | 3,866 | |||||||||
Unrealized (gain) loss
|
(6,936 | ) | 14,456 | 31,833 | 13,817 | ||||||||||||
$ | (2,101 | ) | $ | 18,395 | $ | 39,800 | $ | 17,683 | |||||||||
Six months ended June 30, 2005 compared to six months ended June 30, 2004 |
39
Real Estate |
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||
(In $000s, except per unit data) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
(Restated) | (Restated) | |||||||||||||||||
Revenues:
|
||||||||||||||||||
Rental real estate:
|
||||||||||||||||||
Interest income on financing leases
|
$ | 1,801 | $ | 2,490 | $ | 3,767 | $ | 5,426 | ||||||||||
Rental income
|
1,982 | 1,901 | 4,017 | 3,792 | ||||||||||||||
Property development
|
14,459 | 12,443 | 22,738 | 17,457 | ||||||||||||||
Resort activities
|
6,603 | 2,938 | 12,166 | 4,273 | ||||||||||||||
Total revenues
|
24,845 | 19,772 | 42,688 | 30,948 | ||||||||||||||
Operating expenses:
|
||||||||||||||||||
Rental real estate
|
1,404 | 1,417 | 3,456 | 3,564 | ||||||||||||||
Property development
|
11,310 | 7,705 | 18,357 | 11,063 | ||||||||||||||
Resort activities
|
7,432 | 2,867 | 14,028 | 4,937 | ||||||||||||||
Total expenses
|
20,146 | 11,989 | 35,841 | 19,564 | ||||||||||||||
Operating income
|
$ | 4,699 | $ | 7,783 | $ | 6,847 | $ | 11,384 | ||||||||||
40
Rental Real Estate |
Three months ended June 30, 2005 compared to June 30, 2004 |
Six months ended June 30, 2005 compared to June 30, 2004 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In $000s, except unit data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Properties sold
|
7 | 25 | 11 | 33 | ||||||||||||
Proceeds received
|
$ | 4,856 | 99,349 | $ | 37,608 | 118,087 | ||||||||||
Mortgage debt
|
| | 10,702 | 93,845 | ||||||||||||
Total gain recorded
|
2,644 | 48,032 | 15,834 | 61,007 | ||||||||||||
Gain (loss) recorded in operations
|
$ | | 225 | $ | (176 | ) | (5,821 | ) | ||||||||
Gain recorded in discontinued operations(i)
|
2,644 | 48,257 | 15,658 | 55,186 |
(i) | A gain of $5.7 million on the sale of resort properties was recognized in the three months ended March 31, 2005 in addition to gains on the rental portfolio. |
Property Development |
Three months ended June 30, 2005 compared to June 30, 2004 |
Six months ended June 30, 2005 compared to June 30, 2004 |
41
Resort Operations |
Three months ended June 30, 2005 compared to June 30, 2004 |
Six months ended June 30, 2005 compared to June 30, 2004 |
Corporate and Investments |
General and Administrative Expenses |
Three Months ended June 30, 2005 compared to June 30, 2004 |
Six Months ended June 30, 2005 compared to June 30, 2004 |
Acquisition Costs |
Interest Income and Expense |
42
Other Income (Expense) |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In $000s) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Restated) | (Restated) | |||||||||||||||
Net gains (losses) on marketable securities
|
$ | (21,324 | ) | $ | 8,310 | $ | 380 | $ | 37,167 | |||||||
Minority interest
|
616 | 75 | 1,547 | 744 | ||||||||||||
Gain on sale or disposition of real estate
|
(10 | ) | (225 | ) | 176 | 5,821 | ||||||||||
Other
|
(162 | ) | (1,099 | ) | (599 | ) | (1,808 | ) | ||||||||
$ | (20,880 | ) | $ | 7,061 | $ | 1,504 | $ | 41,924 | ||||||||
Effective Income Tax Rate |
43
June 30, 2005 | ||||
(In $000s) | ||||
Senior unsecured 7.125% notes due 2013
|
$ | 480,000 | ||
Senior unsecured 8.125% notes due 2012
|
350,760 | |||
Senior secured 7.85% notes due 2012
|
215,000 | |||
Borrowings under credit facilities
|
110,934 | |||
Mortgages payable
|
83,649 | |||
GBH 11% Notes
|
44,957 | |||
Other
|
5,738 | |||
Total long-term debt
|
1,291,038 | |||
Less: current portion
|
70,162 | |||
$ | 1,220,876 | |||
44
American Casino Borrowings |
Contractual Commitments |
Less Than | 1-3 | 3-5 | After | ||||||||||||||||||
1 Year | Years | Years | 5 Years | Total(1) | |||||||||||||||||
(In $ millions) | |||||||||||||||||||||
Mortgages payable
|
$ | 23.8 | $ | 9.7 | $ | 29.2 | $ | 40.3 | $ | 103.0 | |||||||||||
Acquisition of WestPoint Stevens
|
312.0 | | | | 312.0 | ||||||||||||||||
Senior secured notes payable
|
| | | 215.0 | 215.0 | ||||||||||||||||
GBH 11% notes payable
|
45.0 | | | | 45.0 | ||||||||||||||||
Senior unsecured notes payable
|
| | | 831.0 | 831.0 | ||||||||||||||||
Capital expenditures
|
90.0 | | | | 90.0 | ||||||||||||||||
Interest on borrowings
|
85.8 | 159.4 | 159.4 | 173.9 | 578.5 | ||||||||||||||||
Construction and development obligations
|
28.0 | 15.0 | | | 43.0 | ||||||||||||||||
Total
|
$ | 584.6 | $ | 184.1 | $ | 188.6 | $ | 1,260.2 | $ | 2,217.5 | |||||||||||
GBH 11% Notes Payable |
45
Off Balance Sheet Arrangements |
46
General |
| Competition for acquisitions could adversely affect us and new acquisitions may fail to perform as expected. | |
| We may not be able to identify suitable investments. | |
| Our investments may be subject to significant uncertainties. | |
| We and AREH are holding companies and will depend on the businesses of our subsidiaries to satisfy our obligations under the notes. | |
| Certain of our management are committed to the management of other businesses. | |
| We may be subject to the pension liabilities of our affiliates. | |
| We are subject to the risk of possibly becoming an investment company. | |
| We may become taxable as a corporation. |
Oil and Gas |
| The oil and gas industry is highly regulated and federal, state and municipal licensing authorities have significant control over our operations. | |
| We face substantial risks in the oil and gas industry. | |
| We may be subject to environmental liability. | |
| 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. | |
| Oil and gas prices are likely to be volatile. | |
| 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. |
47
| Government regulations impose costs on abandoning oil and gas facilities. | |
| The oil and gas industry is highly competitive. |
Gaming |
| Rising operating costs for our gaming and entertainment properties could have a negative impact on our profitability. | |
| We face substantial competition in the hotel and casino industry. | |
| 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. | |
| The gaming industry is highly regulated. The gaming authorities and state and municipal licensing authorities have significant control over our operations. | |
| 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 gaming results of operations. |
Real Estate |
| Our investment in property development may be more costly than anticipated. | |
| 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. | |
| We may be subject to environmental liability. |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
48
ITEM 4. | CONTROLS AND PROCEDURES |
Item 1. | Legal Proceedings |
49
Item 4. | Submission of Matters to a Vote of Securities Holders |
Votes Cast | ||||||||||||||||
Matter | For | Against | Withheld | Broker Non-Votes | ||||||||||||
I. The Acquisitions
|
41,455,508 | 595,437 | 63,991 | 380 | ||||||||||||
II. The LP Amendment
|
41,756,000 | 289,648 | 67,763 | 1,905 | ||||||||||||
III. The OLP Amendment
|
41,742,726 | 290,950 | 68,887 | 12,753 | ||||||||||||
IV. The Grant of the Meister Option
|
41,655,180 | 371,647 | 73,525 | 14,963 |
Item 6. | Exhibits |
3 | .1 | Amendment No. 4 to Amended and Restated Agreement of Limited Partnership of American Real Estate Partners, L.P. | ||
3 | .2 | Amendment No. 3 to Amended and Restated Agreement of Limited Partnership of American Real Estate Holdings Limited Partnership. | ||
10 | .1 | Amendment No. 1 to Purchase Agreement, dated January 21, 2005, by and among American Real Estate Partners, L.P., as Purchaser, and Cyprus, LLC as Seller (incorporated by reference to Exhibit 99.1 to AREPs Form 8-K (SEC File No. 1-9516), filed on May 27, 2005). | ||
10 | .2 | Asset Purchase Agreement, dated June 23, 2005, by and among WS Textile Co., Inc., New Textile One, Inc., New Textile Two, Inc., Textile Co., Inc., WestPoint Stevens Inc., WestPoint Stevens Inc. I, WestPoint Stevens Stores Inc., and J.P. Stevens Enterprises, Inc. (incorporated by reference to Exhibit 10.1 to AREPs Form 8-K (SEC File No. 1-9516), filed on July 1, 2005). | ||
10 | .3 | Equity Commitment Agreement, dated June 23, 2005, by and among WS Textile Co., Inc., Textile Holding LLC, American Real Estate Holdings Limited Partnership and Aretex LLC (incorporated by reference to Exhibit 10.2 to AREPs Form 8-K (SEC File No. 1-9516), filed on July 1, 2005). | ||
10 | .4 | Rights Offering Sponsor Agreement, dated June 23, 2005, by and between WS Textile Co., Inc. and American Real Estate Holdings Limited Partnership (incorporated by reference to Exhibit 10.3 to AREPs Form 8-K (SEC File No. 1-9516), filed on July 1, 2005). | ||
10 | .5 | Option Grant Agreement between American Real Estate Partners, L.P. and Keith A. Meister (incorporated by reference to Exhibit 10.1 to AREPs Form 8-K (SEC File No. 1-9516), filed on July 6, 2005). | ||
10 | .6 | Registration Rights Agreement, dated June 30, 2005 between American Real Estate Partners, L.P. and Highcrest Investors Corp., Arnos Corp., Cyprus, LLC and Gascon Partners. | ||
31 | .1 | Certification of Chief Executive Officerpursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. | ||
31 | .2 | Certification of Chief Financial Officerpursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. | ||
32 | .1 | Certification of Principal Executive Officerpursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
32 | .2 | Certification of Principal Financial Officerpursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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AMERICAN REAL ESTATE PARTNERS, L.P. | |
By: American Property Investors, Inc., the general partner of American Real Estate Partners, L.P. |
By: | /s/ Jon F. Weber |
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Jon F. Weber | |
President |
AMERICAN REAL ESTATE PARTNERS, L.P. | |
By: American Property Investors, Inc., the general partner of American Real Estate Partners, L.P. |
By: | /s/ John P. Saldarelli |
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John P. Saldarelli | |
Treasurer, Chief Financial Officer | |
and Principal Accounting Officer |
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3 | .1 | Amendment No. 4 to Amended and Restated Agreement of Limited Partnership of American Real Estate Partners, L.P. | ||
3 | .2 | Amendment No. 3 to Amended and Restated Agreement of Limited Partnership of American Real Estate Holdings Limited Partnership. | ||
10 | .1 | Amendment No. 1 to Purchase Agreement, dated January 21, 2005, by and among American Real Estate Partners, L.P., as Purchaser, and Cyprus, LLC as Seller (incorporated by reference to Exhibit 99.1 to AREPs Form 8-K (SEC File No. 1-9516), filed on May 27, 2005). | ||
10 | .2 | Asset Purchase Agreement, dated June 23, 2005, by and among WS Textile Co., Inc., New Textile One, Inc., New Textile Two, Inc., Textile Co., Inc., WestPoint Stevens Inc., WestPoint Stevens Inc. I, WestPoint Stevens Stores Inc., and J.P. Stevens Enterprises, Inc. (incorporated by reference to Exhibit 10.1 to AREPs Form 8-K (SEC File No. 1-9516), filed on July 1, 2005). | ||
10 | .3 | Equity Commitment Agreement, dated June 23, 2005, by and among WS Textile Co., Inc., Textile Holding LLC, American Real Estate Holdings Limited Partnership and Aretex LLC (incorporated by reference to Exhibit 10.2 to AREPs Form 8-K (SEC File No. 1-9516), filed on July 1, 2005). | ||
10 | .4 | Rights Offering Sponsor Agreement, dated June 23, 2005, by and between WS Textile Co., Inc. and American Real Estate Holdings Limited Partnership (incorporated by reference to Exhibit 10.3 to AREPs Form 8-K (SEC File No. 1-9516), filed on July 1, 2005). | ||
10 | .5 | Option Grant Agreement between American Real Estate Partners, L.P. and Keith A. Meister (incorporated by reference to Exhibit 10.1 to AREPs Form 8-K (SEC File No. 1-9516), filed on July 6, 2005). | ||
10 | .6 | Registration Rights Agreement, dated June 30, 2005 between American Real Estate Partners, L.P. and Highcrest Investors Corp., Arnos Corp., Cyprus, LLC and Gascon Partners. | ||
31 | .1 | Certification of Chief Executive Officerpursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. | ||
31 | .2 | Certification of Chief Financial Officerpursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002. | ||
32 | .1 | Certification of Principal Executive Officerpursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
32 | .2 | Certification of Principal Financial Officerpursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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(1) | to require each such Limited Partner to, subject to Article X, dispose of its Partnership Interest within 30 days (or such earlier date as may be required by the applicable Nevada Gaming Authority) of the occurrence of the event described in clause (a) or (b) above, or | ||
(2) | to redeem the Partnership Interest of such Limited Partner, on behalf of and for the account of the Partnership, at a redemption price (the Redemption Price) equal to the lowest of: |
(i) | the market price for such Partnership Interest on the Filing Date which, in the case of a Depositary Unit, shall be the Unit Price; | ||
(ii) | the price at which such Limited Partner acquired the Partnership Interest; and | ||
(iii) | such other lesser amount as may be required by any Nevada Gaming Authority. |
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General Partner | ||||||
AMERICAN PROPERTY INVESTORS, INC. | ||||||
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By: | /s/ John P. Saldarelli | |||||
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Name: | John P. Saldarelli | ||||
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Title: | Vice President | ||||
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Limited Partners | ||||||
By: AMERICAN PROPERTY INVESTORS, INC., | ||||||
(attorney-in-fact) | ||||||
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By: | /s/ John P. Saldarelli | |||||
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Name: | John P. Saldarelli | ||||
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Title: | Vice President |
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General Partner | ||||||
AMERICAN PROPERTY INVESTORS, INC. | ||||||
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||||||
By: | /s/ John P. Saldarelli | |||||
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Name: | John P. Saldarelli | ||||
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Title: | Vice President | ||||
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Limited Partner | ||||||
AMERICAN REAL ESTATE PARTNERS, L.P. | ||||||
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By: AMERICAN PROPERTY INVESTORS, INC., General Partner | ||||||
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||||||
By: | /s/ John P. Saldarelli | |||||
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Name: | John P. Saldarelli | ||||
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Title: | Vice President |
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AMERICAN REAL ESTATE PARTNERS, L.P. | ||||||
By: American Property Investors, Inc., | ||||||
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Its general partner | |||||
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By: |
/s/ Keith Meister
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Name: | Keith Meister | ||||
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Title: | Chief Executive Officer |
HOLDERS: | ||||||
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HIGHCREST INVESTORS CORP., | ||||||
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By: |
/s/ Richard Buonato
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Name: | Richard Buonato | ||||
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Title: | Senior Vice President | ||||
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ARNOS CORP., | ||||||
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By: |
/s/ Edward Mattner
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Name: | Edward Mattner | ||||
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Title: | Vice President | ||||
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CYPRUS, LLC | ||||||
By: Barberry Corp., Managing Member | ||||||
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By: |
/s/ Edward Mattner
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Name: | Edward Mattner | ||||
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Title: | Authorized Signatory | ||||
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GASCON PARTNERS | ||||||
By:Cigas Corp., Managing General Partner | ||||||
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By: |
/s/ Edward Mattner
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Name: | Edward Mattner | ||||
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Title: | President |
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 this Report any change 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 | |
Chief Executive Officer of | |
American Property Investors, Inc., | |
the General Partner of | |
American Real Estate Partners, L.P. |
53
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 this Report any change 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 | |
Treasurer and Chief Financial Officer of | |
American Property Investors, Inc., | |
the General Partner of | |
American Real Estate Partners, L.P. |
54
(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 | |
Chief Executive Officer of | |
American Property Investors, Inc., | |
the General Partner of | |
American Real Estate Partners, L.P. |
55
(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 | |
Treasurer and Chief Financial Officer | |
American Property Investors, Inc., | |
the General Partner of | |
American Real Estate Partners, L.P. |
56