Exhibit 99.1
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The unaudited pro forma condensed consolidated financial statement information set forth below is presented to reflect the pro forma effects of the acquisition of substantially all of the assets of WestPoint Stevens Inc. as if it occurred on the dates indicated as discussed below. The attached unaudited pro forma condensed consolidated statement of earnings for the year ended December 31, 2004, also reflect the acquisitions of NEG Holding LLC, Panaco, Inc., GB Holdings, Inc. and Atlantic Coast Entertainment, Inc. in June 2005.
The unaudited pro forma condensed consolidated statements of earnings for the nine months ended September 30, 2005 and the year ended December 31, 2004 have been prepared as if the acquisition had occurred on January 1, 2004. The unaudited pro forma condensed consolidated statements of earnings for the nine months ended September 30, 2005 and the year ended December 31, 2004 give effect to the unaudited pro forma adjustments necessary to account for the acquisition.
The unaudited pro forma condensed consolidated financial statement information is based on, and should be read together with (1) our consolidated financial statements for the nine months ended September 30, 2005 (unaudited) incorporated by reference to our Form 10-Q filed on November 14, 2005 and for the year ended December 31, 2004 incorporated by reference to our Form 8-K filed on December 1, 2005 and (2) the consolidated financial statements for the six months ended June 30, 2005 (unaudited) and for the year ended December 31, 2004, of WestPoint Stevens, Inc., incorporated by reference to our Form 8-K/ A filed on October 21, 2005. A Form 8-K was filed on August 12, 2005, disclosing the acquisition.
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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
Nine Months Ended September 30, 2005
Historical | Pro Forma Adjustments | ||||||||||||||||||||||||
American Real | WPS | Pro Forma Adjustments | |||||||||||||||||||||||
Estate Partners, | Westpoint | Bankruptcy | for WPS Acquisition | ||||||||||||||||||||||
L.P. | Stevens Inc. | Consolidated | Adjustment(4) | (1), (2), (3) and (5) | Pro Forma | ||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
(In thousands, except unit and per unit data) | |||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Home fashion | $ | 183,627 | $ | 728,362 | $ | 911,989 | $ | $ | $ | 911,989 | |||||||||||||||
Gaming | 371,474 | 371,474 | 371,474 | ||||||||||||||||||||||
Oil and gas | 86,709 | 86,709 | 86,709 | ||||||||||||||||||||||
Real estate | 66,947 | 66,947 | 66,947 | ||||||||||||||||||||||
708,757 | 728,362 | 1,437,119 | — | — | 1,437,119 | ||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||
Home fashion | 188,717 | 809,153 | 997,870 | (41,168 | ) | 956,702 | |||||||||||||||||||
Gaming | 324,214 | 324,214 | 324,214 | ||||||||||||||||||||||
Oil and gas | 115,924 | 115,924 | 115,924 | ||||||||||||||||||||||
Real estate | 54,201 | 54,201 | 54,201 | ||||||||||||||||||||||
Holding company | 8,054 | 8,054 | 8,054 | ||||||||||||||||||||||
Acquisition costs | 4,099 | 4,099 | 4,099 | ||||||||||||||||||||||
Restructuring and impairment charges | — | 4,078 | 4,078 | 4,078 | |||||||||||||||||||||
695,209 | 813,231 | 1,508,440 | — | (41,168 | ) | 1,467,272 | |||||||||||||||||||
Operating income (loss) | 13,548 | (84,869 | ) | (71,321 | ) | — | 41,168 | (30,153 | ) | ||||||||||||||||
Other income (expense), net: | |||||||||||||||||||||||||
Interest expense | (78,874 | ) | (52,523 | ) | (131,397 | ) | 52,523 | (78,874 | ) | ||||||||||||||||
Interest and other income | 37,457 | 37,457 | (10,236 | ) | 27,221 | ||||||||||||||||||||
Impairment loss from GB Holding, Inc. bankruptcy | (52,366 | ) | (52,366 | ) | (52,366 | ) | |||||||||||||||||||
Other income (expense), net | (12,218 | ) | 493 | (11,725 | ) | 20,699 | 8,974 | ||||||||||||||||||
Chapter 11 expenses | — | (22,944 | ) | (22,944 | ) | 22,944 | — | ||||||||||||||||||
Loss from continuing operations before income taxes | (92,453 | ) | (159,843 | ) | (252,296 | ) | 22,944 | 104,154 | (125,198 | ) | |||||||||||||||
Income tax (expense ) benefit | (18,993 | ) | 1,908 | (17,085 | ) | (17,085 | ) | ||||||||||||||||||
Loss from continuing operations | $ | (111,446 | ) | $ | (157,935 | ) | $ | (269,381 | ) | $ | 22,944 | $ | 104,154 | $ | (142,283 | ) | |||||||||
Loss from continuing operations attributable to: | |||||||||||||||||||||||||
Limited partners | $ | (108,694 | ) | $ | (138,917 | ) | |||||||||||||||||||
General partner | (2,752 | ) | (3,366 | ) | |||||||||||||||||||||
$ | (111,446 | ) | $ | (142,283 | ) | ||||||||||||||||||||
Loss from continuing operations per limited partnership unit: | |||||||||||||||||||||||||
Basic earnings: | |||||||||||||||||||||||||
Loss from continuing operations per LP unit | $ | (2.12 | ) | $ | (2.71 | ) | |||||||||||||||||||
Weighted average limited partnership units outstanding | 51,351,133 | 51,351,133 | |||||||||||||||||||||||
Diluted earnings: | |||||||||||||||||||||||||
Loss from continuing operations per LP unit | $ | (2.12 | ) | $ | (2.71 | ) | |||||||||||||||||||
Weighted average limited partnership units and equivalent partnership units outstanding | 51,351,133 | 51,351,133 | |||||||||||||||||||||||
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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
Year Ended December 31, 2004
Historical | Pro Forma Adjustments | ||||||||||||||||||||||||
American Real | WPS | Pro Forma Adjustments | |||||||||||||||||||||||
Estate Partners, | Westpoint | Bankruptcy | for WPS Acquisition | ||||||||||||||||||||||
L.P. | Stevens Inc. | Consolidated | Adjustment(4) | (1), (2), (3) and (5) | Pro Forma | ||||||||||||||||||||
(In thousands, except unit and per unit data) | |||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Home fashion | $ | — | $ | 1,618,684 | $ | 1,618,684 | $ | $ | $ | 1,618,684 | |||||||||||||||
Gaming | 470,836 | 470,836 | 470,836 | ||||||||||||||||||||||
Oil and gas | 137,988 | 137,988 | 137,988 | ||||||||||||||||||||||
Real estate | 61,695 | 61,695 | 61,695 | ||||||||||||||||||||||
670,519 | 1,618,684 | 2,289,203 | — | — | 2,289,203 | ||||||||||||||||||||
Expenses: | |||||||||||||||||||||||||
Home fashion | — | 1,621,694 | 1,621,694 | (67,942 | ) | 1,553,752 | |||||||||||||||||||
Gaming | 419,601 | 419,601 | 419,601 | ||||||||||||||||||||||
Oil and gas | 104,935 | 104,935 | 104,935 | ||||||||||||||||||||||
Real estate | 44,938 | 44,938 | 44,938 | ||||||||||||||||||||||
General and administrative expenses | 7,779 | 7,779 | 7,779 | ||||||||||||||||||||||
Acquisition costs | 414 | 414 | 414 | ||||||||||||||||||||||
Restructuring and impairment charges | — | 54,396 | 54,396 | 54,396 | |||||||||||||||||||||
577,667 | 1,676,090 | 2,253,757 | — | (67,942 | ) | 2,185,815 | |||||||||||||||||||
Operating income (loss) | 92,852 | (57,406 | ) | 35,446 | — | 67,942 | 103,388 | ||||||||||||||||||
Other income (expense), net: | |||||||||||||||||||||||||
Interest expense | (62,183 | ) | (78,263 | ) | (140,446 | ) | 78,263 | (62,183 | ) | ||||||||||||||||
Interest and other income | 45,241 | 45,241 | (13,800 | ) | 31,441 | ||||||||||||||||||||
Other income (expense), net | 15,016 | (7,826 | ) | 7,190 | 11,944 | 19,134 | |||||||||||||||||||
Chapter 11 expenses | — | (34,605 | ) | (34,605 | ) | 34,605 | — | ||||||||||||||||||
Income (loss) from continuing operations before income taxes | 90,926 | (178,100 | ) | (87,174 | ) | 34,605 | 144,349 | 91,780 | |||||||||||||||||
Income tax expense | (18,312 | ) | (5,175 | ) | (23,487 | ) | (23,487 | ) | |||||||||||||||||
Income (loss) from continuing operations | $ | 72,614 | $ | (183,275 | ) | $ | (110,661 | ) | $ | 34,605 | $ | 144,349 | $ | 68,293 | |||||||||||
Income (loss) from continuing operations attributable to: | |||||||||||||||||||||||||
Limited partners | $ | 51,325 | $ | 47,090 | |||||||||||||||||||||
General partner | 21,289 | 21,203 | |||||||||||||||||||||||
$ | 72,614 | $ | 68,293 | ||||||||||||||||||||||
Income (loss) from continuing operations per limited partnership unit: | |||||||||||||||||||||||||
Basic earnings: | |||||||||||||||||||||||||
Income from continuing operations per LP unit | $ | 1.11 | $ | 1.02 | |||||||||||||||||||||
Weighted average limited partnership units outstanding | 46,098,284 | 46,098,284 | |||||||||||||||||||||||
Diluted earnings: | |||||||||||||||||||||||||
Income from continuing operations per LP unit | $ | 1.09 | $ | 1.01 | |||||||||||||||||||||
Weighted average limited partnership | |||||||||||||||||||||||||
Units and equivalent partnership units outstanding | 51,542,312 | 51,542,312 | |||||||||||||||||||||||
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AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENT INFORMATION
On August 8, 2005, our indirect majority owned subsidiary, WestPoint International, Inc. or WPI, consummated the purchase of substantially all the assets of WestPoint Stevens Inc., a home fashions consumer products company, pursuant to an 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. The United States Bankruptcy Court for the Southern District of New York entered an order on July 8, 2005 approving the Asset Purchase Agreement and the sale of the assets pursuant to section 363 of the United States Bankruptcy Code. As of the current date, the Company owns 67.7% of the common stock of WPI. On November 16, 2005, the United States District Court remanded the acquisition agreement to U.S. Bankruptcy Court for further proceedings. Depending upon the outcome of the proceedings the Company’s share of WPI’s common stock could drop below 50%.
(1) Reflects the elimination of WestPoint Stevens interest expense as a result of the emergence from bankruptcy of WestPoint Stevens. | |
(2) Reflects the elimination of interest income earned by AREP on its investment in WestPoint Stevens debt. | |
(3) Reflects an adjustment to depreciation expense based upon WPI’s fixed asset values of WestPoint Stevens after its emergence from bankruptcy. | |
(4) Reflects the elimination of Chapter 11 bankruptcy expenses related to the emergence from bankruptcy of WestPoint Stevens. | |
(5) Reflects an adjustment to record the required minority interest impact in the statement of earnings. |
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