SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
March 29, 1999
Date of Report (Date of earliest event reported)
AMERICAN REAL ESTATE PARTNERS, L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-9516
(State of Organization) (Commission File Number)
13-3398766
(IRS Employer Identification Number)
100 SOUTH BEDFORD ROAD
MT. KISCO, NY 10549
(Address of Registrant's Principal Executive Office) (Zip Code)
(914) 242-7700
(Registrant's telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On March 29, 1999, the Registrant announced 1998 fourth quarter and full
year financial results and that no distributions are expected to be made
during 1999. Reference is made to the press release, dated March 29, 1999,
annexed hereto as Exhibit 21, for information regarding the announcement.
Item 7. Exhibits.
Exhibit No. Description of Document
21 Press Release, dated March 29, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN REAL ESTATE PARTNERS, L.P.
(Registrant)
By: American Property Investors, Inc.
General Partner
By: /S/ John P. Saldarelli
John P. Saldarelli
Secretary and Treasurer
Date: March 29, 1999
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EXHIBIT INDEX
Exhibit Number Description Page No.
21 Press Release, dated March 29, 1999. 5
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EXHIBIT 21
Contact: John P. Saldarelli
Secretary and Treasurer
(914) 242-7700
FOR IMMEDIATE RELEASE
AMERICAN REAL ESTATE PARTNERS, L.P.
REPORTS FULL YEAR AND FOURTH QUARTER RESULTS
AND THAT NO DISTRIBUTIONS ARE EXPECTED TO BE MADE IN 1999
Mount Kisco, New York, March 29, 1998 -- American Real Estate Partners, L.P.
("AREP") (NYSE:ACP) today reported the following full year and fourth quarter
financial results.
For the calendar year 1998, diluted earnings per weighted average limited
partnership unit outstanding decreased from $2.13 in 1997 to $1.28 in 1998. For
calendar year 1998, diluted earnings before property and securities transactions
per weighted average limited partnership unit outstanding decreased from $1.16
in 1997 to $1.06 in 1998, and net gain from property and securities transactions
per weighted average limited partnership unit outstanding was $.22 in 1998
compared to $.97 in 1997. Earnings for the calendar year 1998 decreased by
$4,746,000 as compared to earnings for calendar year 1997 primarily due to the
1997 non-recurring gain on the sale of RJR stock partially offset by increased
earnings before property and securities transactions and the provision for loss
on mortgages receivable recorded in 1997.
For the fourth quarter of 1998, diluted earnings per weighted average limited
partnership unit outstanding increased from $.14 in 1997 to $.27 in 1998. For
the quarter ended, diluted earnings before property and securities transactions
per weighted average limited partnership unit outstanding decreased from $.28 in
1997 to $.22 in 1998, and net gain (loss) from property and securities
transactions per weighted average limited partnership unit outstanding was $.05
in 1998 compared to $(.14) in 1997.
Earnings for the fourth quarter of 1998 increased by $7,481,000 as compared to
earnings for the fourth quarter of 1997, primarily due to the provision for loss
on mortgages receivable recorded in 1997 partially offset by decreased earnings
before property and securities transactions.
AREP also announced that no distributions are expected to be made in 1999. In
making its announcement, AREP noted it plans to continue to apply available cash
flow toward its operations, repayment of maturing indebtedness, tenant
requirements and other capital expenditures and for Partnership contingencies
and reserves, including environmental matters and scheduled lease expirations.
By the end of the year 2002, net leases representing approximately 27% of AREP's
net annual rentals from its portfolio will be due for renewal, and by the end of
the year 2004, 37% of such rentals will be due for renewal. AREP believes that
it should continue to hold and invest, rather than distribute, cash. No
distributions were made to Unitholders during 1998.
AREP further stated it continues to believe that excess cash should be used to
enhance long-term Unitholder value through the improvement of its existing
assets, the support of AREP's debt and property obligations, and selected
investment in assets and companies with assets undervalued by the market as
appropriate opportunities arise. AREP believes it should continue to diversify
its portfolio and that in the real estate area it should seek to make
acquisitions of land for development and land development companies, which may
include those from affiliates of the General Partner, and other real estate
operating companies which may have significant assets under development and may
enhance its ability to develop and manage these properties, as well as
non-performing loans and limited partnership units in thinly traded syndicated
real estate partnerships. AREP noted it had tendered for limited partnership
units in a series of such real estate partnerships and has acquired
non-performed mortgage notes of companies in the gaming industry undergoing
restructuring as well as land it is developing. AREP anticipates pursuing
additional investments in the gaming industry including the possible acquisition
of additional interests in the Stratosphere Tower, Casino & Hotel from
affiliates of the General Partner. Any such acquisition by AREP of additional
interests in Stratosphere may be made in exchange for Units in AREP, provided
the terms thereof are fair and reasonable to AREP. AREP, its General Partner,
and the directors and officers of the General Partner are currently in the
process of pursuing gaming applications to obtain licenses from the Nevada
Gaming Authority. Likewise, investments by AREP in non-real estate related
assets may include debt or equity securities of companies which may be
undergoing recapitalization. These types of investments, both real estate and
non-real estate related, may involve debt restructuring, capital expenditures
and active asset management, and by their nature may not be readily financeable
and may not generate immediate positive cash flow. As such, they require AREP to
maintain a strong capital base both to react quickly to these market
opportunities as well as to allow AREP to rework the assets to enhance their
turnaround performance. AREP's investment strategy continues to include the
reinvestment of capital transaction proceeds and refinancing proceeds.
American Real Estate Partners, L.P. is master limited partnership primarily
engaged in acquiring and managing real estate investments, with the primary
focus on office, retail, industrial, hotel and residential properties.
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<TABLE>
<CAPTION>
AMERICAN REAL ESTATE PARTNERS, L.P.
REPORTS FULL YEAR AND FOURTH QUARTER RESULTS
AND THAT NO DISTRIBUTIONS ARE EXPECTED TO BE MADE IN 1999
In thousands of dollars per share data
Year Ended December 31, 1998 1997
- ----------------------- ---- ----
<S> <C> <C>
Revenues $ 93,306 $ 70,918
=============== --------------
Earnings before property transactions $ 58,371 $ 41,020
Provision for loss on mortgages receivable - (9,790)
Provisions for loss on real estate (1,180) (1,085)
Gain on sales and disposition of real estate 9,065 16,051
Gain on sale of limited partnership interests 4,382 -
Gain on sale of marketable equity securities - 29,188
--------------- --------------
Net earnings $ 70,638 $ 75,384
=============== ==============
Net earnings per L.P. unit:
Basic:
Earnings before property and securities
transactions $ 1.16 $ 1.19
Net gain from property and securities
transactions .26 $ 1.08
--------------- ---------------
Net earnings $ 1.42 $ 2.27
=============== ===============
Weighted average units outstanding 46,173,284 31,179,246
=============== ===============
Diluted:
Earnings before property and securities
transactions $ 1.06 $ 1.16
Net gain from property and securities
transactions .22 .97
--------------- ---------------
Net earnings $ 1.28 $ 2.13
=============== ===============
Weighted average units and equivalent units
outstanding 54,215,339 34,655,395
=============== ==============
</TABLE>
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<TABLE>
<CAPTION>
AMERICAN REAL ESTATE PARTNERS, L.P.
REPORTS FULL YEAR AND FOURTH QUARTER RESULTS
AND THAT NO DISTRIBUTIONS ARE EXPECTED TO BE MADE IN 1999
In thousands of dollars except per share data
Fourth quarter ended December 31, 1998 1997
- --------------------------------- ---- ----
(unaudited)
<S> <C> <C>
Revenues $ 23,588 $ 22,042
=============== ===============
Earnings before property and securities
transactions $ 12,118 $ 15,152
Provision for loss on mortgages receivable - (9,790)
Provision for loss on real estate (578) (380)
Gain (loss) on sales and disposition of real estate (695) 2,764
Gain on sale of limited partnership interests 4,382 -
--------------- ---------------
Net earnings $ 15,227 $ 7,746
=============== ===============
Net earnings per L.P. unit:
Basic:
Earnings before property and securities
transactions $ .24 $ .30
Net gain (loss) from property and
securities transactions .06 (.16)
--------------- ---------------
Net earnings $ .30 $ .14
=============== ===============
Weighted average units outstanding 46,096,284 46,198,284
=============== ===============
Diluted:
Earnings before property and securities
transactions $ .22 $ .28
Net gain (loss) from property and
securities transactions .05 (.14)
--------------- ---------------
Net earnings $ .27 $ .14
=============== ===============
Weighted average units and 55,030,578 53,751,026
=============== ===============
equivalent units outstanding
</TABLE>
