Exhibit 99.4
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)(1) Financial Statements:
The following financial statements of American Real Estate Partners, L.P.
are included in Item 8 (Exhibit 99.3 to this Form 8-K):
Report of Independent Registered Public Accounting Firm .....................F-1
Consolidated Balance Sheets -- December 31, 2003 and 2002....................F-2
Consolidated Statements of Earnings -- Years ended December 31, 2003, 2002
and 2001...................................................................F-3
Consolidated Statements of Changes in Partners' Equity and Comprehensive
Income -- Years ended December 31, 2003, 2002, and 2001....................F-4
Consolidated Statements of Cash Flows -- Years ended December 31, 2003,
2002 and 2001..............................................................F-5
Notes to Consolidated Financial Statements...................................F-7
(a)(2) Financial Statement Schedules:
Schedule III: Real Estate Owned and Revenues Earned (by tenant or
guarantor, as applicable) is included herein.
All other Financial Statement schedules have been omitted because the
required financial information is not applicable or the information is shown in
the Financial Statements or Notes thereto.
(a)(3) Exhibits:
3.1 -- Certificate of Limited Partnership of AREP, dated February 17, 1987
(incorporated by reference to AREP's Exhibit 3.1 to Form 10-Q for
the quarter ended March 31, 2004, 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 AREP's Exhibit 3.2
to Form 10-Q for the quarter ended March 31, 2004, filed on May 10,
2004).
3.3 -- Amendment No. 1 to the Amended and Restated Agreement of Limited
Partnership of AREP (filed as Exhibit 3.3 to AREP's Annual Report on
Form 10-K for the year ended December 31, 1994 and incorporated
herein by reference).
3.4 -- Certificate of Limited Partnership of American Real Estate Holdings
Limited Partnership (the "Subsidiary"), dated February 17, 1987, and
amendment thereto, dated March 12, 1987 (incorporated by reference
to AREP's Exhibit 3.4 to Form 10-Q for the quarter ended March 31,
2004, filed on May 10, 2004.).
3.5 -- Amended and Restated Agreement of Limited Partnership of the
Subsidiary, dated as of July 1, 1987 (incorporated by reference to
AREP's Exhibit 3.5 to Form 10-Q for the quarter ended March 31,
2004, 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 and filed as Exhibit
10.1 to 8-K filed on August 16, 1996 and incorporated herein by
reference.
3.7 -- Amendment No. 1 to the Amended and Restated Agreement of Limited
Partnership of the Subsidiary dated August 16, 1996 filed as Exhibit
10.2 to the 8-K dated August 16, 1996 and incorporated herein by
reference.
3.8 -- Amendment No. 3. To the Amended and Restated Agreement of Limited
Partnership of AREP dated May 9, 2002. (Included in the annual
report on 10-K for the year ended December 31, 2002 and incorporated
herein by reference)
3.9 -- Amendment No. 2 to the Amended and Restated Agreement of Limited
Partnership of the Subsidiary
IV-1
dated June 14, 2002. (Included in the annual report on 10-K for the
year ended December 31, 2002 and incorporated herein by reference)
4.1 -- Depositary Agreement among AREP, the General Partner and Registrar
and Transfer Company, dated as of July 1, 1987 (incorporated by
reference to AREP's Exhibit 4.1 to Form 10-Q for the quarter ended
March 31, 2004, filed on May 10, 2004).
4.2 -- Amendment No. 1 to the Depositary Agreement (filed as Exhibit 4.2 to
AREP's Annual Report on Form 10-K for the year ended December 31,
1994 and incorporated herein by reference).
4.3 -- Specimen Depositary Receipt (filed as Exhibit No. 4.2 to AREP's
Annual Report on Form 10-K for the year ended December 31, 1987 and
incorporated herein by reference).
4.4 -- Form of Transfer Application (filed as Exhibit No. 4.3 to AREP's
Annual Report on Form 10-K for the year ended December 31, 1987 and
incorporated herein by reference).
4.5 -- Specimen Certificate representing Preferred Units (filed as Exhibit
No. 4.9 to AREP's Registration Statement on Form S-3 (Registration
No. 33-54767) and incorporated herein by reference).
10.1 -- Nonqualified Unit Option Plan (filed as Exhibit No. 10.1 to AREP's
Annual Report on Form 10-K for the year ended December 31, 1987 and
incorporated herein by reference).
10.2 -- Distribution Reinvestment Plan (filed as Exhibit No. 10.3 to AREP's
Annual Report on Form 10-K for the year ended December 31, 1987 and
incorporated herein by reference).
10.10 -- Subscription Guaranty Agreement between AREP and High Coast Limited
Partnership (the "Guarantor") (filed as Exhibit 4.10 to AREP's
Registration Statement on Form S-3 (Registration No. 33-54767) and
incorporated herein by reference).
10.11 -- Registration Rights Agreement between AREP and the Guarantor (filed
as Exhibit 4.11 to AREP's Registration Statement on Form S-3
(Registration No. 33-54767) and incorporated herein by reference).
10.12 -- Amended and Restated Agency Agreement (filed as Exhibit 10.12 to
AREP's Annual Report on Form 10-K for the year ended December 31,
1994 and incorporated herein by reference).
10.13 -- Subscription Agent Agreement (filed as Exhibit 10.13 to AREP's
Annual Report on Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference).
10.14 -- Subscription Guaranty Agreement between AREP and the Guarantor
(filed as Exhibit 4.10 to Amendment No. 1 to AREP's Registration
Statement on Form S-3 (Registration No. 333-31561) and incorporated
herein by reference).
10.15 -- Registration Rights Agreement between AREP and the Guarantor (filed
as Exhibit 4.11 to Amendment No. 1 to AREP's Registration Statement
on Form S-3 (Registration No. 333-31561) and incorporated herein by
reference).
10.16 -- Subscription Agent Agreement filed as Exhibit 99.1 to AREP's
Registration Statement on Form S-3 (Registration No. 333-31561) and
incorporated herein by reference).
10.17 -- Note dated December 27, 2001 from Carl Icahn to American Real Estate
Holdings, L.P. in the amount of $250 million and incorporated herein
by reference.
10.18 -- Pledge Agreement dated December 27, 2001 between American Real
Estate Holdings, L.P. and Carl Icahn and incorporated herein by
reference.
10.19 -- Accommodation Pledge Agreement dated December 27, 2001, between
American Real Estate Holdings, L.P. and various pledgors and
incorporated herein by reference.
16 -- Letter dated September 27, 1991 of Deloitte & Touche regarding
change in accountants (filed as Exhibit No. A to AREP's Current
Report on Form 8-K dated October 3, 1991 and incorporated herein by
reference).
21 -- List of Subsidiaries (incorporated by reference to AREP's Exhibit 21
to Form 10-Q for the quarter ended March 31, 2004, filed on May 10,
2004).
31.1 -- Certification of Chief Executive Officer - pursuant to Section
302(a) of the Sarbanes-Oxley Act of 2002.
IV-2
31.2 -- Certification of Chief 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 -- Audit Committee Charter was adopted on March 12, 2004 and is
incorporated herein as Exhibit 99.1.
99.2 -- Code of Ethics for Principal Executive Officer and Senior Financial
Officers of American Property Investors, Inc. and American Real
Estate Partners, L.P. is incorporated herein as Exhibit 99.2.
(b) Reports on Form 8-K:
(1) A Form 8-K was filed on October 2, 2003 -- American Real Estate
Partners, L.P. Acquires Certain Securities of NEG Inc.
(2) A Form 8-K was filed on November 14, 2003 -- American Real
Estate Partners, L.P. reports Third Quarter and Nine Months Results.
(3) A Form 8-K was filed on November 19, 2003 -- American Real
Estate Partners, L.P. Comments on Trading Activity.
IV-3
SCHEDULE III
AMERICAN REAL ESTATE PARTNERS, L.P.
a limited partnership Schedule III
------------
REAL ESTATE OWNED AND REVENUES EARNED
No. of Amount of
State Locations Encumberances
----- --------- -------------
COMMERCIAL PROPERTY LAND AND BUILDING
- -------------------------------------
Acme Markets, Inc. and FPBT of Penn. PA 1
Alabama Power Company AL 5
Amer Stores, Eckerd & Marburn NJ 1
Atrium VA 1 $ 18,716,286
Best Products Co., Inc. VA 1
Chesebrough-Pond's Inc. CN 1
Collins Foods International, Inc. OR 3
Collins Foods International, Inc. CA 1
Dillon Companies, Inc. MO 1
Dragon court MA 1
Duke Power Co. NC 1
Easco Corp. NC 1
European American Bank and Trust Co. NY 1
Farwell Bldg. MN 1
First National Supermarkets, Inc. CT 1 19,848,351
Fisher Scientific Company IL 1
Forte Hotels International, Inc. NJ 1
Fox Grocery Company WV 1
Gino's, Inc. MO 1
Gino's, Inc. OH 1
Golf Road IL 1 6,682,664
Grand Union Co. MD 1
Grand Union Co. NY 1
Grand Union Co. VA 1
Whalen NY 1
Gunite IN 1
G.D. Searle & Co. IL 1
G.D. Searle & Co. MN 1
G.D. Searle & Co. IL 1
Integra A Hotel and Restaurant Co. AL 1
Integra A Hotel and Restaurant Co. AL 1
Integra A Hotel and Restaurant Co. IL
Integra A Hotel and Restaurant Co. IN 1
Integra A Hotel and Restaurant Co. OH 1
Integra A Hotel and Restaurant Co. MO 1
Integra A Hotel and Restaurant Co. TX 1
Integra A Hotel and Restaurant Co. MI 1
Intermountain Color KY 1
J.C. Penney Company, Inc. MA 1
Kings buffet FL 1
K-Mart Corporation LA 1
K-Mart Corporation WI 1
K-Mart Corporation MN 1
K-Mart Corporation FL 1
K-Mart Corporation IA 1
K-Mart Corporation FL 1
K-Mart Corporation FL 1
K-Mart Corporation IL 1
Kobacker Stores, Inc. MI 2
Kobacker Stores, Inc. KY 1
Kobacker Stores, Inc. OH 4
Landmark Bancshares Corporation MO 1
Levitz Furniture Corporation NY 1
Louisiana Power and Light Company LA 6
Louisiana Power and Light Company LA 7
Marsh Supermarkets, Inc. IN 1
Mid-South TN 1 12,700,000
Montgomery Ward, Inc. PA 1
Montgomery Ward, Inc. NJ 1
Morrison, Inc. AL 1
Part 1 - Real estate owned at December 31, 2003 - Accounted for under the:
--------------------------------------------------------------------------
Operating Method
----------------
Rent due
Amount and accrued
Carried or received
Initial Cost Cost of at close Reserve for in advance at
to Company Improvements of period Depreciation end of period
-------------- ------------ --------------- ------------ -------------
COMMERCIAL PROPERTY LAND AND BUILDING
- -------------------------------------
Acme Markets, Inc. and FPBT of Penn. $ 2,004,393 $ 165,714 $ 2,170,107 $1,560,784 $14,736
Alabama Power Company
Amer Stores, Eckerd & Marburn 2,045,641 2,045,641 (2) 1,632,403
Atrium 27,921,246 8,627 27,929,873 (2) 2,293,391
Best Products Co., Inc. 3,303,553 73,262 3,376,815 128,769 (25,833)
Chesebrough-Pond's Inc. 1,549,805 1,549,805 (4) 1,191,062 (11,770)
Collins Foods International, Inc. 250,812 250,812 (2) 16,352
Collins Foods International, Inc. 134,253 134,253 (2) 9,289
Dillon Companies, Inc. 546,681 546,681 382,676 (11,217)
Dragon court 3,700,000 44,706 3,744,706 176,368
Duke Power Co. 3,464,225 3,464,225 344,114
Easco Corp. 157,560 888,452 1,046,012 44,423
European American Bank and Trust Co. 1,355,210 1,355,210 (2) 1,284,888
Farwell Bldg. 5,081,105 5,081,105 (4) 2,595,341
First National Supermarkets, Inc.
Fisher Scientific Company 597,806 597,806 (2) 276,722 13,583
Forte Hotels International, Inc.
Fox Grocery Company
Gino's, Inc.
Gino's, Inc. 314,012 314,012 22,415
Golf Road 9,288,263 11,591 9,299,854 (2) 1,395,053
Grand Union Co.
Grand Union Co. 874,765 874,765 83,272
Grand Union Co. 266,468 266,468 (2) 200,472
Whalen 7,934,020 7,934,020 (2) 226,925 670
Gunite 1,134,565 1,134,565 (2) 1,065,034
G.D. Searle & Co.
G.D. Searle & Co. 339,358 339,358 169,939
G.D. Searle & Co. 323,559 323,559 (2) 250,581
Integra A Hotel and Restaurant Co. 434,056 434,056 (4) 9,422
Integra A Hotel and Restaurant Co. 458,428 458,428 4,658
Integra A Hotel and Restaurant Co.
Integra A Hotel and Restaurant Co. 443,249 443,249 (4) 4,235 1,082
Integra A Hotel and Restaurant Co. 204,192 204,192 (2) 4,082
Integra A Hotel and Restaurant Co. 414,887 414,887 9,503
Integra A Hotel and Restaurant Co. 438,097 438,097 10,465
Integra A Hotel and Restaurant Co. 431,486 431,486 (2) 9,851 1,219
Intermountain Color 560,444 560,444 523,715
J.C. Penney Company, Inc. 2,484,262 2,484,262 1,987,410 (20,854)
Kings buffet 910,425 910,425 21,401 (279)
K-Mart Corporation
K-Mart Corporation
K-Mart Corporation
K-Mart Corporation
K-Mart Corporation
K-Mart Corporation 2,636,000 2,636,000 (2) 1,899,765
K-Mart Corporation
K-Mart Corporation 600,000 600,000 15,866
Kobacker Stores, Inc. 112,225 112,225 1,068
Kobacker Stores, Inc. 88,364 88,364 769
Kobacker Stores, Inc. 298,496 298,496 2,487
Landmark Bancshares Corporation
Levitz Furniture Corporation
Louisiana Power and Light Company 5,636,053 5,636,053 483,544
Louisiana Power and Light Company 6,984,806 6,984,806 553,118
Marsh Supermarkets, Inc. 5,001,933 5,001,933 3,097,560
Mid-South 18,226,344 18,226,344 (2) 642,413
Montgomery Ward, Inc. 3,289,166 3,289,166 (4) 2,290,820
Montgomery Ward, Inc. 1,178,030 1,178,030 (4) 12,812
Morrison, Inc. 858,112 858,112 21,353
Part 2 - Revenues earned for the
Year ended December 31, 2003
--------------------------------
Financing Method
----------------
Minimum lease Expended
payments due Total for interest,
and accrued revenue taxes, Net income
Net at end applicable repairs and applicable
Investment of period to period expenses to period
------------ ------------- -------------- -------------- ---------------
COMMERCIAL PROPERTY LAND AND BUILDING
- -------------------------------------
Acme Markets, Inc. and FPBT of Penn. $ 224,856 $ 125,712 $ 99,144
Alabama Power Company $ 4,849,942 557,828 0 557,828
Amer Stores, Eckerd & Marburn 565,214 36,898 528,316
Atrium 4,107,462 3,166,166 941,296
Best Products Co., Inc. 232,500 379,156 (146,656)
Chesebrough-Pond's Inc. 141,236 9,094 132,142
Collins Foods International, Inc. 32,489 4,088 28,401
Collins Foods International, Inc. 17,646 2,817 14,829
Dillon Companies, Inc. 26,956 9,016 17,940
Dragon court 143,148 748,277 (605,129)
Duke Power Co. 797,177 115,171 682,006
Easco Corp. 321,000 58,490 262,510
European American Bank and Trust Co. 175,000 36 174,964
Farwell Bldg. 1,151,819 313,290 838,529
First National Supermarkets, Inc. 19,815,365 1,856,505 874,730 981,775
Fisher Scientific Company 163,000 22,286 140,714
Forte Hotels International, Inc. 5,352,110 494,512 0 494,512
Fox Grocery Company 2,128,666 196,007 450 195,557
Gino's, Inc. 0 0
Gino's, Inc. 51,733 5,604 46,129
Golf Road 943,033 817,663 125,370
Grand Union Co. 0 0 0
Grand Union Co. 108,000 20,840 87,160
Grand Union Co. 24,150 4,464 19,686
Whalen 30,700 1,035,623 (1,004,923)
Gunite 0 68,419 (68,419)
G.D. Searle & Co. 0 447 (447)
G.D. Searle & Co. 37,000 2,562 34,438
G.D. Searle & Co. 47,080 4,516 42,564
Integra A Hotel and Restaurant Co. 108,549 7,537 101,012
Integra A Hotel and Restaurant Co. 145,211 4,659 140,552
Integra A Hotel and Restaurant Co. 87,925 (3) 4,591 (3) 83,334 (3)
Integra A Hotel and Restaurant Co. 131,038 4,600 126,438
Integra A Hotel and Restaurant Co. 82,000 3,266 78,734
Integra A Hotel and Restaurant Co. 91,818 7,919 83,899
Integra A Hotel and Restaurant Co. 103,960 11,942 92,018
Integra A Hotel and Restaurant Co. 149,589 10,134 139,455
Intermountain Color 98,422 7,968 90,454
J.C. Penney Company, Inc. 250,244 1,709 248,535
Kings buffet 103,161 37,478 65,683
K-Mart Corporation 0 24,295 (24,295)
K-Mart Corporation 0 (119,468) 119,468
K-Mart Corporation 0 111,970 (111,970)
K-Mart Corporation 0 8,713 (8,713)
K-Mart Corporation 1,046,571 100,422 3,037 97,385
K-Mart Corporation 251,420 13,511 237,909
K-Mart Corporation 113,793 (3) 18,207 (3) 95,586 (3)
K-Mart Corporation 58,582 41,145 17,437
Kobacker Stores, Inc. 123,964 $2,412 25,733 111 25,622
Kobacker Stores, Inc. 70,860 1,115 16,480 1,505 14,975
Kobacker Stores, Inc. 299,721 5,531 59,157 0 59,157
Landmark Bancshares Corporation 3,609,872 521,813 317 521,496
Levitz Furniture Corporation 0 0 0
Louisiana Power and Light Company 1,240,853 161,703 1,079,150
Louisiana Power and Light Company 1,299,275 174,703 1,124,572
Marsh Supermarkets, Inc. 506,300 131,844 374,456
Mid-South 1,684,918 1,306,639 378,279
Montgomery Ward, Inc. 314,280 29,294 284,986
Montgomery Ward, Inc. 193,586 12,930 180,656
Morrison, Inc. 0 77,996 (77,996)
S-1
AMERICAN REAL ESTATE PARTNERS, L.P.
a limited partnership Schedule III
------------
REAL ESTATE OWNED AND REVENUES EARNED
No. of Amount of
State Locations Encumberances
----- --------- -------------
Morrison, Inc. GA 1
Morrison, Inc. VA 2
North Carolina National Bank SC 2
Occidental Petroleum Corp. CA 1
Ohio Power Co. Inc. OH 1
Park West KY 1 11,740,990
Park West UPS KY 1 17,605,571
Penske Corp. OH 1
Pneumo Corp. OH 1
Portland General Electric Company OR 1 33,628,639
Rayovac WI 1 15,415,558
Rouse Company MD 1
Safeway Stores, Inc. LA 1
Sams MI 1
Smith's Management Corp. NV 1
Southland Corporation FL 4
Southland Corporation FL 1
Staples NY 1
Stone Container WI 1 5,824,491
Stop & Shop NY 1
Stop & Shop NJ 1
Stop 'N Shop Co., Inc. VA 1
Super Foods Services, Inc. MI 1 4,327,290
SuperValu Stores, Inc. MN 1
SuperValu Stores, Inc. OH 1
SuperValu Stores, Inc. GA 1
SuperValu Stores, Inc. IN 1
Telecom Properties, Inc. OK 1
Telecom Properties, Inc. KY 1
The A&P Company MI 1
The TJX Companies, Inc. IL 1
Tire Distribution Systems Inc. TN 1
Tops Market NY 1
Toys "R" Us, Inc. TX 1
Waban NY 1
Watkins MO 1
Webcraft Technologies MD 1
Wetterau, Inc. PA 1
Wetterau, Inc. NJ 1
Wickes Companies, Inc. CA 1
RESIDENTIAL PROPERTY LAND AND BUILDING
- --------------------------------------
Crown Cliffs AL 1 7,233,108
COMMERCIAL PROPERTY - LAND
- --------------------------
Foodarama supermarkets, Inc. NY 1
Foodarama supermarkets, Inc. PA 1
Gino's, Inc. PA 1
Gino's, Inc. MA 1
Gino's, Inc. NJ 1
J.C. Penney Company, Inc. NY 1
COMMERCIAL PROPERTY - BUILDING
- ------------------------------
AT&T CA 1
Bank of America GA 1
Part 1 - Real estate owned at December 31, 2003 - Accounted for under the:
--------------------------------------------------------------------------
Operating Method
----------------
Rent due
Amount and accrued
Carried or received
Initial Cost Cost of at close Reserve for in advance at
to Company Improvements of period Depreciation end of period
-------------- ------------ --------------- ------------ -------------
Morrison, Inc.
Morrison, Inc. 1,765,899 1,765,899 47,355
North Carolina National Bank 1,450,047 1,450,047 646,536 10,092
Occidental Petroleum Corp.
Ohio Power Co. Inc.
Park West 19,199,296 19,199,296 (2) 2,793,207
Park West UPS 21,109,367 21,109,367 (2) 2,479,441 (1,000)
Penske Corp. 524,956 524,956 19,525 (9,533)
Pneumo Corp. 1,629,713 1,629,713 68,492
Portland General Electric Company
Rayovac 22,065,852 22,065,852 (2) 2,243,143
Rouse Company
Safeway Stores, Inc. 1,782,885 1,782,885 (4) 1,134,894
Sams 8,844,225 8,844,225 2,340,082
Smith's Management Corp.
Southland Corporation 862,367 862,367 513,035
Southland Corporation
Staples 2,391,540 2,391,540 (2) 265,276
Stone Container 9,028,574 9,028,574 1,287,134
Stop & Shop 900,865 900,865 83,272
Stop & Shop 800,770 800,770 74,021
Stop 'N Shop Co., Inc. 2,158,099 2,158,099 57,647
Super Foods Services, Inc.
SuperValu Stores, Inc.
SuperValu Stores, Inc.
SuperValu Stores, Inc.
SuperValu Stores, Inc.
Telecom Properties, Inc.
Telecom Properties, Inc. 340,321 340,321 1,181
The A&P Company 999,172 999,172 13,041
The TJX Companies, Inc.
Tire Distribution Systems Inc. 120,946 120,946 (4) 75,200
Tops Market 262,357 262,357 24,249 (15,726)
Toys "R" Us, Inc.
Waban 8,478,095 8,478,095 (2) 1,164,396
Watkins
Webcraft Technologies
Wetterau, Inc. (4)
Wetterau, Inc. 747,116 747,116 32,088
Wickes Companies, Inc. 700,333 700,333 (4) 195,738 (4,533)
RESIDENTIAL PROPERTY LAND AND BUILDING
- --------------------------------------
Crown Cliffs 11,457,646 93,253 11,550,899 (1) 3,662,776
COMMERCIAL PROPERTY - LAND
- --------------------------
Foodarama supermarkets, Inc. 140,619 140,619 (2)
Foodarama supermarkets, Inc. 112,554 112,554 (2) 1,200
Gino's, Inc. 36,271 36,271 (2)
Gino's, Inc. 50,904 50,904 (2)
Gino's, Inc. 61,050 61,050 (2)
J.C. Penney Company, Inc. 51,009 51,009 (4) 458
COMMERCIAL PROPERTY - BUILDING
- ------------------------------
AT&T 2,546,139 23,566 2,569,705 (4) 82,237
Bank of America
Part 2 - Revenues earned for the
Year ended December 31, 2003
--------------------------------
Financing Method
----------------
Minimum lease Expended
payments due Total for interest,
and accrued revenue taxes, Net income
Net at end applicable repairs and applicable
Investment of period to period expenses to period
----------- ------------- -------------- -------------- ---------------
Morrison, Inc. 183,360 0 183,360
Morrison, Inc. 0 84,818 (84,818)
North Carolina National Bank 69,476 69,670 (194)
Occidental Petroleum Corp. 0 1,228 (1,228)
Ohio Power Co. Inc. 3,221,531 114,600 305,332 0 305,332
Park West 1,559,346 1,473,397 85,949
Park West UPS 1,959,010 1,734,716 224,294
Penske Corp. 63,551 44,467 19,084
Pneumo Corp. 243,750 54,793 188,957
Portland General Electric Company 46,892,351 (414,424) 4,074,139 2,685,000 1,389,139
Rayovac 1,993,330 1,786,171 207,159
Rouse Company 359,392 134,037 225,355
Safeway Stores, Inc. 85,150 11,974 73,176
Sams 1,245,569 161,517 1,084,052
Smith's Management Corp. 32,531 9,856 22,675
Southland Corporation 100,359 3,748 96,611
Southland Corporation 9,993 (3) 330 (3) 9,663 (3)
Staples 352,729 120,169 232,560
Stone Container 885,334 678,909 206,425
Stop & Shop 108,000 20,818 87,182
Stop & Shop 96,000 18,505 77,495
Stop 'N Shop Co., Inc. 109,255 179,573 (70,318)
Super Foods Services, Inc. 8,670,045 931,980 396,831 535,149
SuperValu Stores, Inc. 0 0 0
SuperValu Stores, Inc. 0 0 0
SuperValu Stores, Inc. 0 3,430 (3,430)
SuperValu Stores, Inc. 72,678 14,354 58,324
Telecom Properties, Inc. (252) 3,654 (3,906)
Telecom Properties, Inc. 34,672 6,763 27,909
The A&P Company 77,851 106,413 (28,562)
The TJX Companies, Inc. 29,575 5,996 23,579
Tire Distribution Systems Inc. 13,200 0 13,200
Tops Market 31,453 6,277 25,176
Toys "R" Us, Inc. 0 136,637 (136,637)
Waban 795,285 196,043 599,242
Watkins 0 0 0
Webcraft Technologies 0 (22,313) 22,313
Wetterau, Inc. 0 45,072 (45,072)
Wetterau, Inc. 150,800 25,788 125,012
Wickes Companies, Inc. 145,452 38,825 106,627
RESIDENTIAL PROPERTY LAND AND BUILDING
- --------------------------------------
Crown Cliffs 2,000,409 1,871,243 129,166
COMMERCIAL PROPERTY - LAND
- --------------------------
Foodarama supermarkets, Inc. 16,800 0 16,800
Foodarama supermarkets, Inc. 14,400 0 14,400
Gino's, Inc. 8,571 0 8,571
Gino's, Inc. 8,571 0 8,571
Gino's, Inc. 8,571 0 8,571
J.C. Penney Company, Inc. 5,500 0 5,500
COMMERCIAL PROPERTY - BUILDING
- ------------------------------
AT&T 449,548 247,906 201,642
Bank of America 2,798,908 40,573 292,259 26,584 265,675
S-2
AMERICAN REAL ESTATE PARTNERS, LP
a limited partnership Schedule III
------------
REAL ESTATE OWNED AND REVENUES EARNED
No. of Amount of
State Locations Encumberances
----- --------- -------------
Baptist Hospital 1 TN 1 19,885,664
Baptist Hospital 2 TN 1 7,380,651
Harwood Square IL 1
Safeway Stores, Inc. CA 1
Toys "R" Us, Inc. RI 1
United Life & Accident Ins. Co. NH 1
Wickes Companies, Inc. PA 1
-------------
180,989,263
-------------
HOTEL AND RESORT OPERATING PROPERTIES
- -------------------------------------
New Seabury MA
Holiday Inn FL
Bayswater FL
-------------
0
-------------
LESS HELD FOR SALE (82,861,069)
- ------------------ -------------
$ 98,128,194
=============
Part 1 - Real estate owned at December 31, 2003 - Accounted for under the:
--------------------------------------------------------------------------
Operating Method
----------------
Rent due
Amount and accrued
Carried or received
Initial Cost Cost of at close Reserve for in advance at
to Company Improvements of period Depreciation end of period
-------------- ------------ --------------- ------------ -------------
Baptist Hospital 1
Baptist Hospital 2
Harwood Square 6,943,373 800 6,944,173 (4) 4,186,890 29,900
Safeway Stores, Inc. 558,652 558,652 558,652
Toys "R" Us, Inc.
United Life & Accident Ins. Co.
Wickes Companies, Inc.
------------ ---------- ------------ ----------- --------
252,397,367 1,309,971 253,707,338 51,001,774 (23,481)
------------ ---------- ------------ ----------- --------
HOTEL AND RESORT OPERATING PROPERTIES
- -------------------------------------
New Seabury 37,490,989 (403,250) 37,087,739 6,704,739
Holiday Inn 11,103,847 365,123 11,468,970 (4) 5,104,068 280,213
Bayswater 5,310,365 5,310,365 531,855
------------ ---------- ------------ ----------- --------
53,905,201 (38,127) 53,867,074 12,340,662 280,213
------------ ---------- ------------ ----------- --------
LESS HELD FOR SALE (146,395,413) (20,218) (146,415,631) (20,152,684)
- ------------------ ------------ ---------- ------------ ----------- --------
$159,907,155 $1,251,626 $161,158,781 $43,189,752 $256,732
============ ========== ============ =========== ========
Part 2 - Revenues earned for the
Year ended December 31, 2003
--------------------------------
Financing Method
----------------
Minimum lease Expended
payments due Total for interest,
and accrued revenue taxes, Net income
Net at end applicable repairs and applicable
Investment of period to period expenses to period
------------ ------------- -------------- ------------- ---------------
Baptist Hospital 1 23,438,376 1,105,517 1,862,951 1,574,065 288,886
Baptist Hospital 2 8,726,374 410,319 691,443 583,409 108,034
Harwood Square 790,838 246,064 544,774
Safeway Stores, Inc. 26,900 495 26,405
Toys "R" Us, Inc. 797,816 10,430 77,173 0 77,173
United Life & Accident Ins. Co. 3,165,914 274,017 950 273,067
Wickes Companies, Inc. 2,347,187 467,454 0 467,454
------------ ---------- ----------- ----------- -----------
137,355,573 1,276,073 43,298,285 24,714,252 18,584,033
------------ ---------- ----------- ----------- -----------
HOTEL AND RESORT OPERATING PROPERTIES
- -------------------------------------
New Seabury 11,678,516 10,996,669 681,847
Holiday Inn 3,911,515 3,253,372 658,143
Bayswater 2,914,000 2,789,000 125,000
------------ ---------- ----------- ----------- -----------
0 0 18,504,031 17,039,041 1,464,990
------------ ---------- ----------- ----------- -----------
LESS HELD FOR SALE (22,459,690) (16,320,692) (6,138,998)
- ------------------ ------------ ---------- ----------- ----------- -----------
$137,355,573 $1,276,073 $39,342,626 $25,432,601 $13,910,025
============ ========== =========== =========== ===========
- ----------
(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 12/31/03.
(3) Sold in 2003 and included in discontinued ops.
(4) Such properties have been reclassified to held for sale during the quarter
ended March 31, 2004. As a result, for the year ended December 31, 2003,
such operating lease and hotel and resort operating revenues, expenses and
net income have been reclassified to discontinued operations.
S-3
SCHEDULE III
AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
REAL ESTATE OWNED AND REVENUES EARNED
YEAR ENDED DECEMBER 31, 2003 (IN $000'S)
1a. A reconciliation of the total amount at which real estate owned, accounted
for under the operating method and hotel and resort operating properties
and development properties, was carried at the beginning of the period,
with the total at the close of the period, is shown below:
Balance -- January 1, 2003................................. $ 303,460
Additions during period.................................... 1,675
Reclassifications during period from financing leases...... 5,065
Reclassifications during period to held for sale........... (146,416)
Disposals during period.................................... (2,626)
-----------
Balance December 31, 2003.................................. $ 161,158
===========
b. A reconciliation of the total amount of accumulated depreciation at the
beginning of the period, with the total at the close of the period, is
shown below:
Balance -- January 1, 2003...................................$ 54,978
Depreciation during period................................... 8,605
Reclassifications during period to held for sale............. (20,153)
Disposals during period...................................... (240)
-----------
Balance -- December 31, 2003.................................$ 43,190
===========
Depreciation on properties accounted for under the operating method is
computed using the straight-line method over the estimated useful life of
the particular property or property components, which range from 5 to 45
years.
2. A reconciliation of the total amount at which real estate owned, accounted
for under the financing method, was carried at the beginning of the
period, with the total close of the period, is shown below:
Balance -- January 1, 2003...................................$ 155,458
Reclassifications during period to operating properties...... (5,065)
Disposals during period...................................... (7,708)
Amortization of unearned income.............................. 13,115
Minimum lease rentals received............................... (18,444)
-----------
Balance -- December 31, 2003.................................$ 137,356
===========
3. The aggregate cost of real estate owned for Federal income tax purposes is
$377,539 before accumulated depreciation.
S-4
SCHEDULE III
AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
REAL ESTATE OWNED AND REVENUES EARNED -- (CONTINUED)
YEAR ENDED DECEMBER 31, 2003 (IN $000'S)
4. Net income applicable to the period in Schedule III is reconciled with net
earnings as follows:
Net income applicable to financing and operating leases and hotel and resort operating
properties........................................................................... $ 13,910
Net income applicable to Stratosphere hotel and casino.................................. 22,716(1)
Net income applicable to land, house and condominium sales.............................. 4,136
Net income applicable to NEG, Inc....................................................... 19,522(2)
Add:
Interest income on U.S. Government and Agency Obligations and other
investments........................................................................ 22,543
Dividend and unallocated other income................................................ 3,027
---------
85,854
---------
Deduct expenses not allocated:
General and administrative expenses.................................................. 6,850
Nonmortgage interest expense......................................................... 2,449
Equity in losses of GB Holdings, Inc................................................. 3,466
Other................................................................................ 3,703
---------
16,468
---------
Operating income after income taxes..................................................... 69,386
Provision for loss on real estate....................................................... (750)
Gain on sale of real estate............................................................. 7,121
Loss on sale of securities.............................................................. (961)
Write-down of securities................................................................ (18,798)
Write-down of mortgages and notes receivable............................................ 2,607
---------
Income from continuing operations....................................................... 58,605
Discontinued Operations:
Income from discontinued operations.................................................. 6,139
Net gain on property transactions.................................................... 3,353
---------
Earnings from discontinued operations................................................... 9,492
---------
Net earnings......................................................................... $ 68,097
=========
- --------------
(1) Includes depreciation expense of $12,276 and income tax benefit of $6,720.
(2) Includes income tax expense of $225.
S-5
SCHEDULE III
AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
REAL ESTATE OWNED AND REVENUES EARNED
YEAR ENDED DECEMBER 31, 2002 (IN $000'S)
1a. A reconciliation of the total amount at which real estate owned, accounted
for under the operating method and hotel and resort operating properties,
was carried at the beginning of the period, with the total at the close of
the period, is shown below:
Balance -- January 1, 2002................................ $ 273,887
Additions during period................................... 20,886
Reclassifications during period from financing leases..... 13,503
Write downs............................................... (1,992)
Disposals during period................................... (2,824)
----------
Balance -- December 31, 2002.............................. $ 303,460
==========
b. A reconciliation of the total amount of accumulated depreciation at the
beginning of the period, with the total at the close of the period, is
shown below:
Balance -- January 1, 2002................................ $ 48,057
Depreciation during period................................ 7,105
Disposals during period................................... (184)
----------
Balance -- December 31, 2002.............................. $ 54,978
=========
Depreciation on properties accounted for under the operating method is
computed using the straight-line method over the estimated useful life of
the particular property or property components, which range from 7 to 45
years.
2. A reconciliation of the total amount at which real estate owned, accounted
for under the financing method, was carried at the beginning of the
period, with the total close of the period, is shown below:
Balance -- January 1, 2002............................ $ 176,757
Reclassifications during period....................... (13,503)
Write downs........................................... (257)
Disposals during period............................... (1,560)
Amortization of unearned income....................... 14,722
Minimum lease rentals received........................ (20,663)
Other................................................. (38)
----------
Balance -- December 31, 2002.......................... $ 155,458
==========
3. The aggregate cost of real estate owned for Federal income tax purposes is
$382,208 before accumulated depreciation.
S-6
SCHEDULE III
AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
REAL ESTATE OWNED AND REVENUES EARNED -- (CONTINUED)
YEAR ENDED DECEMBER 31, 2002 (IN $000'S)
4. Net income applicable to the period in Schedule III is reconciled with net
earnings as follows:
Net income applicable to financing and operating leases and hotel and resort operating
properties............................................................................ $ 14,128
Net income applicable to Stratosphere hotel and casino................................... 8,916(1)
Net income applicable to land, house and condominium sales............................... 20,384
Net income applicable to NEG Inc......................................................... 9,415(2)
Add:
Interest income on U.S. Government and Agency Obligations and other investments..... 30,344
Dividend and unallocated other income............................................... 2,684
Equity in earnings of GB Holdings, Inc.............................................. 305
---------
86,176
---------
Deduct expenses not allocated:
General and administrative expenses................................................. 7,029
Non-mortgage interest expense....................................................... 1,272
Other............................................................................... 1,625
---------
9,926
---------
Operating income after income taxes...................................................... 76,250
Provision for loss on real estate........................................................ (3,212)
Gain on sale of real estate.............................................................. 8,990
Write down of securities................................................................. (12,226)
Minority interest in net earnings of Stratosphere Corporation............................ (1,943)
---------
Income from continuing operations........................................................ 67,859
Discontinued Operations:
Income from discontinued operations................................................. 6,007
---------
Net earnings........................................................................ $ 73,866
=========
- --------------
(1) Includes depreciation expense of $13,328 and income tax expense of $2,412.
(2) Includes income tax expense of $5,068.
S-7
SCHEDULE III
AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
REAL ESTATE OWNED AND REVENUES EARNED
YEAR ENDED DECEMBER 31, 2001 (IN $000'S)
1a. A reconciliation of the total amount at which real estate owned, accounted
for under the operating method and hotel and resort operating properties,
was carried at the beginning of the period, with the total at the close of
the period, is shown below:
Balance -- January 1, 2001............................................ $ 262,356
Additions during period............................................... 14,586
Reclassifications during period from financing leases................. 9,755
Write downs........................................................... (3,184)
Reclassifications during period to assets held for sale............... (8,072)
Other reclassifications............................................... (1,130)
Disposals during period............................................... (424)
----------
Balance -- December 31, 2001.......................................... $ 273,887
==========
b. A reconciliation of the total amount of accumulated depreciation at the
beginning of the period, with the total at the close of the period, is
shown below:
Balance -- January 1, 2001............................................ $ 43,471
Depreciation during period............................................ 6,252
Disposals during period............................................... (266)
Reclassifications during period to assets held for sale............... (1,400)
---------
Balance -- December 31, 2001.......................................... $ 48,057
=========
Depreciation on properties accounted for under the operating method is
computed using the straight-line method over the estimated life of the
particular property or property components, which range from 5 to 45
years.
2. A reconciliation of the total amount at which real estate owned, accounted
for under the financing method, was carried at the beginning of the
period, with the total at the close of the period, is shown below:
Balance -- January 1, 2001............................................ $ 193,428
Reclassifications during period to operating properties............... (9,755)
Disposals during period............................................... (71)
Amortization of unearned income....................................... 16,935
Minimum lease rentals received........................................ (23,780)
----------
Balance -- December 31, 2001.......................................... $ 176,757
==========
3. The aggregate cost of real estate owned for Federal income tax purposes is
$399,813 before accumulated depreciation.
S-8
SCHEDULE III
AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
REAL ESTATE OWNED AND REVENUES EARNED -- (CONTINUED)
YEAR ENDED DECEMBER 31, 2001 (IN $000'S)
4. Net income applicable to the period in Schedule III is reconciled with net
earnings as follows:
Net income applicable to financing and operating leases and hotel and resort operating
properties........................................................................... $ 15,733
Net income applicable to Stratosphere hotel and casino.................................. 4,628(1)
Net income applicable to land, house and condominium sales.............................. 12,967
Net income applicable to NEG, Inc....................................................... 37,300(2)
Add:
Interest income on U.S. Government and Agency Obligations and other investments.... 30,367
Dividend and unallocated other income.............................................. 4,989
Equity in earnings of GB Holdings, Inc............................................. 1,807
---------
107,791
---------
Deduct expenses not allocated:
General and administrative expenses................................................ 7,080
Non-mortgage interest expense...................................................... 5,306
Other.............................................................................. 1,540
---------
13,926
---------
Operating income after income taxes..................................................... 93,865
Provision for loss on real estate....................................................... (3,184)
Gain on sale of marketable equity and debt securities................................... 6,749
Gain on sale of real estate............................................................. 1,737
Minority interest in net earnings of Stratosphere Corporation........................... (450)
---------
Income from continuing operations....................................................... 98,717
Discontinued Operations:
Income from discontinued operations................................................ 6,117
---------
Net Earnings............................................................................ $ 104,834
=========
- --------------
(1) Includes depreciation expense of $11,257 and income tax expense of $513.
(2) Includes depreciation expense of $6,163 and income tax benefit of $30,590.
S-9
SCHEDULE III
AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
REAL ESTATE OWNED AND RESERVE FOR DEPRECIATION BY STATE
(ACCOUNTED FOR UNDER THE OPERATING METHOD)
DECEMBER 31, 2003 (IN $000'S)
AMOUNT AT WHICH
CARRIED AT RESERVE FOR
STATE CLOSE OF YEAR DEPRECIATION
- ----- --------------- ------------
Alabama..................................... $ 13,301 $ 3,698
California.................................. 3,829 837
Connecticut................................. 1,550 1,191
Florida..................................... 18,553 5,636
Illinois.................................... 7,544 4,203
Indiana..................................... 5,445 3,633
Kentucky.................................... 989 525
Louisiana................................... 14,404 2,172
Massachusetts............................... 43,317 8,869
Michigan.................................... 9,956 2,353
Minnesota................................... 5,420 2,765
Missouri.................................... 962 392
New Jersey.................................. 2,726 119
New York.................................... 2,088 190
North Carolina.............................. 4,510 389
Ohio........................................ 2,767 111
Pennsylvania................................ 5,459 3,852
South Carolina.............................. 1,450 647
Tennessee................................... 121 76
Texas....................................... 438 10
Virginia.................................... 7,301 234
Wisconsin................................... 9,029 1,288
--------- ---------
$ 161,159 $ 43,190
========= =========
S-10
SCHEDULE III
AMERICAN REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
REAL ESTATE OWNED BY STATE
(ACCOUNTED FOR UNDER THE FINANCING METHOD)
DECEMBER 31, 2003 (IN $000'S)
NET
STATE INVESTMENT
- ----- ----------
Alabama......................................................... $ 4,850
Connecticut..................................................... 19,815
Georgia......................................................... 2,799
Iowa............................................................ 1,047
Kentucky........................................................ 71
Michigan........................................................ 8,794
Missouri........................................................ 3,610
New Hampshire................................................... 3,166
New Jersey...................................................... 5,352
Ohio............................................................ 3,521
Oregon.......................................................... 46,892
Pennsylvania.................................................... 2,347
Rhode Island.................................................... 798
Tennessee....................................................... 32,165
West Virginia................................................... 2,129
---------
$ 137,356
=========
S-11