##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934FOR THE QUARTERLY PERIOD ENDED
    JUNE 30, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF
    THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD
    FROM          
    TO   COMMISSION FILE NUMBER 1-9516
      American Real Estate Partners,
    L.P.
 (Exact name of registrant as
    specified in its charter)
  Delaware

13-3398766(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)767 Fifth Avenue,
    Suite 4700, New York, NY(Address of principal
    executive offices)

10153(Zip Code)   (212) 702-4300
 (Registrants telephone number, including area code)
      þ o
  Rule 12-b-2
  Large
    accelerated filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o  Rule 12b-2 o þ




---



##### 



INDEX
  Page No.Part I.


FINANCIAL
    INFORMATIONItem 1.


Financial
    StatementsConsolidated Balance
    Sheets  June 30, 2006 and December 31,
    2005


3Consolidated
    Statements of Operations  Three Months Ended
    June 30, 2006 and 2005


4Consolidated
    Statements of Operations  Six Months Ended
    June 30, 2006 and 2005


5Consolidated
    Statement of Changes in Partners Equity and Comprehensive
    Income  Six Months Ended June 30, 2006


6Consolidated
    Statements of Cash Flows  Six Months Ended
    June 30, 2006 and 2005


7Notes to
    Consolidated Financial Statements


91.
    General


92.
    Related Party Transactions


103.
    Acquisitions


114.
    Operating Units


125.
    Investments and Related Matters


176.
    Inventories, Net


187.
    Trade, Notes and Other Receivables, Net


188.
    Other Current Assets


189.
    Property, Plant and Equipment


1910.
    Other Non-Current Assets


1911.
    Other Non-Current Liabilities


1912.
    Minority Interests


2013.
    Long Term Debt


2014.
    Other Income (Expense)


2215.
    Unit Options


2216.
    Preferred Units


2317.
    Earnings Per Limited Partnership Unit


2318.
    Asset Retirement Obligations  Oil and Gas


2419.
    Oil and Gas Derivatives


2420.
    Segment Reporting


2521.
    Income Taxes


2822.
    Commitments and Contingencies


2823.
    Subsequent Events


29Item 2.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations1.
    Overview


302.
    Results of Operations


303.
    Liquidity and Capital Resources


424.
    Certain Trends and Uncertainties


48Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk


48Item 4.


Controls and
    Procedures


48Part II.


OTHER
    INFORMATION


49Item 1.


Legal
    Proceedings


49Item 1A.


Risk
    Factors


50Item 6.


Exhibits


51Signatures


52Certifications


54EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   2




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##### Table of Contents



Part I.  Financial
    Information  Item 1.
    Financial
    Statements  AMERICAN
    REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIESFORM 10-Q
    JUNE 30, 2006
  CONSOLIDATED BALANCE SHEETS
  June 30,


December 31,2006


2005(Unaudited)(In $000s)ASSETSCurrent assets:Cash and cash equivalents

$
463,677


$
576,123Investments


901,262



820,699Inventories, net


285,716



244,239Trade, notes and other receivables,
    net


213,937



255,014Other current assets


284,140



287,985Total current assets


2,148,732



2,184,060Property, plant and equipment, net:Oil and Gas


796,250



742,459Gaming


617,064



441,059Real Estate


288,351



285,694Home Fashion


115,986



166,026Total property, plant and
    equipment, net


1,817,651



1,635,238Investments


16,324



15,964Intangible assets


26,714



23,402Other assets


108,494



107,798Total assets

$
4,117,915


$
3,966,462LIABILITIES AND PARTNERS
    EQUITYCurrent liabilities:Accounts payable

$
127,626


$
93,807Accrued expenses


158,209



225,690Current portion of long-term debt


21,601



24,155Securities sold not yet purchased


81,722



75,883Margin liability on marketable
    securities


144,596



131,061Total current liabilities


533,754



550,596Long-term debt


1,506,287



1,411,666Other non-current liabilities


77,751



89,085Preferred limited partnership units:$10 liquidation preference, 5%
    cumulative
    pay-in-kind;
    11,400,000 authorized; 11,340,243 and 10,800,397 issued and
    outstanding as of June 30, 2006 and December 31,
    2005, respectively


114,820



112,067Total long-term liabilities


1,698,858



1,612,818Total liabilities


2,232,612



2,163,414Minority interests


263,784



304,599Commitments and contingencies
    (Note 21)Partners equity:Limited partners:Depositary units: 67,850,000
    authorized; 62,994,030 outstanding as of June 30, 2006 and
    December 31, 2005, respectively


1,849,194



1,728,572General partner:


(215,754
)


(218,202
)Treasury units at cost:1,137,200 depositary units


(11,921
)


(11,921
)Partners equity


1,621,519



1,498,449Total liabilities and
    partners equity

$
4,117,915


$
3,966,462    3




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##### Table of Contents



AMERICAN
    REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended June 30, 2006 and 2005
  Three Months EndedJune 30,2006


2005(Unaudited)(In 000s, except per unit amounts)Revenues:Oil and Gas

$
86,606


$
73,360Gaming


134,780



122,568Real Estate


49,065



25,455Home Fashion


237,148



507,599



221,383Expenses:Oil and Gas


40,078



40,933Gaming


119,657



105,576Real Estate


34,214



21,426Home Fashion


285,487



Holding Company


3,675



1,939Acquisition costs






3,362483,111



173,236Operating income


24,488



48,147Other income (expense), net:Interest expense


(31,614
)


(28,825
)Interest income


13,694



14,234Other income (expense), net


46,122



(19,820
)Income from continuing
    operations before income taxes and minority interests


52,690



13,736Income tax expense


(9,155
)


(9,030
)Minority interests


25,828



615Income from continuing
    operations


69,363



5,321Discontinued operations:Income from discontinued operations


440



388Gain on sales and disposition of
    real estate


1,308



2,644Income from discontinued
    operations


1,748



3,032Net earnings

$
71,111


$
8,353Net earnings (loss) attributable to:Limited partners

$
69,696


$
(2,797
)General partner


1,415



11,150$
71,111


$
8,353Net earnings per LP unit:Basic earnings:Income (loss) from continuing
    operations

$
1.10


$
(0.12
)Income from discontinued operations


0.03



0.06Basic earnings (loss) per LP
    unit

$
1.13


$
(0.06
)Weighted average LP units
    outstanding:


61,857



46,271Diluted earnings:Income (loss) from continuing
    operations

$
1.08


$
(0.12
)Income from discontinued operations


0.03



0.06Diluted earnings (loss) per LP
    unit

$
1.11


$
(0.06
)Weighted average LP units and
    equivalent partnership units outstanding


64,523



46,271    4




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##### Table of Contents



AMERICAN
    REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF OPERATIONS
 Six Months Ended June 30, 2006 and 2005
  Six Months EndedJune 30,2006


2005(Unaudited)(In 000s, except perunit amounts)Revenues:Oil and Gas

$
194,898


$
89,038Gaming


261,498



245,235Real Estate


70,399



43,410Home Fashion


480,638



1,007,433



377,683Expenses:Oil and Gas


83,382



78,003Gaming


227,020



209,579Real Estate


51,649



37,255Home Fashion


566,935



Holding Company


14,980



4,847Acquisition costs






3,362943,966



333,046Operating income


63,467



44,637Other income (expense), net:Interest expense


(62,202
)


(52,005
)Interest income


26,286



26,585Other income (expense), net


67,593



6,132Income from continuing
    operations before income taxes and minority interests


95,144



25,349Income tax expense


(17,812
)


(12,436
)Minority interests


40,951



1,547Income from continuing
    operations


118,283



14,460Discontinued operations:Income from discontinued operations


976



1,089Gain on sales and disposition of
    real estate


1,559



21,367Income from discontinued
    operations


2,535



22,456Net earnings

$
120,818


$
36,916Net earnings (loss) attributable to:Limited partners

$
118,414


$
40,330General partner


2,404



(3,414
)$
120,818


$
36,916Net earnings per LP unit:Basic earnings:Income from continuing operations

$
1.87


$
0.40Income from discontinued operations


0.04



0.48Basic earnings per LP
    unit

$
1.91


$
0.88Weighted average LP units
    outstanding:


61,857



46,185Diluted earnings:Income from continuing operations

$
1.83


$
0.40Income from discontinued operations


0.04



0.48Diluted earnings per LP
    unit

$
1.87


$
0.88Weighted average LP units and
    equivalent partnership units outstanding


64,663



46,185    5




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##### Table of Contents



AMERICAN
    REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
  CONSOLIDATED STATEMENT OF CHANGES
 IN PARTNERS EQUITY AND COMPREHENSIVE INCOME
 Six Months Ended June 30, 2006
  LimitedGeneral


PartnersPartners


Equity








TotalEquity


Depositary


Held in Treasury


Partners(Deficit)


Units


Amounts


Units


Equity(In $000s)(Unaudited)Balance, December 31, 2005

$
(218,202
)

$
1,728,572


$
(11,921
)


1,137


$
1,498,449Comprehensive income:Net earnings


2,404



118,414











120,818Net unrealized gains on securities
    available for sale


172



8,462











8,634Other comprehensive income (loss)






(7
)










(7
)Comprehensive income


2,576



126,869











129,445CEO LP unit options


124



6,124











6,248Partnership distribution


(252
)


(12,371
)










(12,623
)Balance, June 30, 2006

$
(215,754
)

$
1,849,194


$
(11,921
)


1,137


$
1,621,519      6




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##### Table of Contents



AMERICAN
    REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months ended June 30, 2006 and 2005
  Six Months EndedJune 30,2006


2005(In $000s)(Unaudited)Cash Flows from Operating
    Activities:Income from continuing operations

$
118,283


$
14,460Adjustments to reconcile net
    earnings to net cash provided by operating activities:Depreciation, depletion and
    amortization


92,401



69,163Investment gains


(62,661
)


(380
)Change in fair market value of Oil
    and Gas derivative contracts


(57,611
)


31,833Preferred LP unit interest expense


2,753



2,636Minority interests


(40,951
)


(1,547
)Stock based compensation expense


6,248



Deferred income tax expense


8,287



8,595Impairment loss on fixed assets


26,726



175Net cash used in activities on
    trading securities


(26,750
)


(3,987
)Other, net


(1,335
)


2,847Changes in operating assets and
    liabilities:Decrease (increase) in trade notes
    and other receivables


41,245



(19,638
)Decrease in other assets


30,065



18,827Increase in inventory


(41,477
)


Increase in accounts payable,
    accrued expenses and other liabilities


2,068



9,449Net cash provided by continuing
    operations


97,291



132,433Income from discontinued operations


2,535



22,456Depreciation and amortization


51



176Net gain from property transactions


(1,559
)


(21,367
)Net cash provided by discontinued
    operations


1,027



1,265Net cash provided by operating
    activities


98,318



133,698Cash Flows from Investing
    Activities:Capital expenditures


(131,384
)


(148,512
)Decrease in other investments






33,928Purchases of marketable equity and
    debt securities


(162,782
)


(116,820
)Proceeds from sales from marketable
    equity and debt securities


162,701



25,017Net proceeds from the sales and
    disposition of real estate






8,414Net proceeds from sales and
    disposition of fixed assets


11,806



Acquisitions of businesses, net of
    cash acquired


(169,649
)


(180,000
)Other






1,631Net cash used in investing
    activities


(289,308
)


(376,342
)Cash Flows from Discontinued
    Operations:Net proceeds from the sales and
    disposition of real estate


8,327



48,365Net cash used in investing
    activities


(280,981
)


(327,977
)    7




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##### Table of Contents



AMERICAN
    REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Continued)
 Six Months ended June 30, 2006 and 2005
  Six Months EndedJune 30,2006


2005(In $000s)(Unaudited)Cash Flows from Financing
    Activities:Partners equity:Members contribution

$



$
9,279Partnership distributions


(12,623
)


Debt:Proceeds from senior notes payable






480,000Proceeds from credit facilities


60,000



62,100Repayment of credit facilities


(4,009
)


Decrease in due to affiliates






(16,342
)Proceeds from mortgages payable


34,250



4,425Mortgages paid upon disposition of
    properties






(3,775
)Periodic principal payments


(2,216
)


(2,932
)Debt issuance costs


(5,185
)


(8,587
)Net cash provided by financing
    activities


70,217



524,168Cash flows from discontinued
    operations:Mortgages paid upon disposition of
    properties






(6,927
)Net cash provided by financing
    activities


70,217



517,241Net increase (decrease) in cash
    and cash equivalents


(112,446
)


322,962Cash and cash equivalents,
    beginning of period


576,123



806,309Cash and cash equivalents, end of
    period

$
463,677


$
1,129,271Supplemental informationCash payments for interest, net of
    amounts capitalized

$
50,547


$
24,667Cash payments for income taxes,
    net of refunds

$
8,389


$
3,017Net unrealized gains (losses) on
    securities available for sale

$
8,634


$
(5,658
)LP unit issuance

$



$
456,998Change in tax asset related to
    acquisition

$



$
4,105Debt conversion relating to
    Atlantic Coast

$



$
29,500    8




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##### Table of Contents



AMERICAN
    REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIESFORM 10-Q
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)
 June 30, 2006
  Note 1.
    General      Form 10-K,
      Change
    in Reporting Entity
    Discontinued
    Operations
    Acquisition
    of the Assets of WestPoint Stevens Inc.
   9




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##### Table of Contents



Acquisition
    of the Assets of the Flamingo Laughlin and Traymore
    Site
    Investments
  available-for-sale available-for-sale available-for-sale
  Filing
    Status of Subsidiaries
    Form S-1. Form S-1 Form S-4. Form S-1.
  New
    Accounting Pronouncements
    Note 2.
    Related
    Party Transactions  a.  Administrative
    Services
   10




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##### Table of Contents



b.  Securities
    Ownership
    Note 3.
    Acquisitions        May 19, 2006Fair ValueFlamingoLaughlin


Traymore Site


TotalCurrent assets

$
7,172


$



$
7,172Land


13,000



61,651



74,651Building and equipment


95,336







95,336Intangible assets


3,397







3,397Assets acquired


118,905



61,651



180,556Liabilities assumed


(4,874
)






(4,874
)Net assets acquired

$
114,031


$
61,651


$
175,682    11




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##### Table of Contents



Call
    Agreement
      Note 4.
    Operating
    Units    a.  Oil
    and Gas
      June 30,


December 31,2006


2005(Unaudited)Current assets

$
111,742


$
172,188Oil and gas properties, full cost
    method


796,250



742,459Other assets


43,120



43,648Total assets

$
951,112


$
958,295Current liabilities

$
54,017


$
103,726Credit facility (non-current)


300,000



300,000Other noncurrent liabilities


51,749



60,479Total liabilities

$
405,766


$
464,205  12




---



##### Table of Contents



Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Gross oil and gas revenues

$
71,135


$
69,662


$
152,318


$
125,925Realized derivative losses


(6,600
)


(4,834
)


(18,687
)


(7,967
)Unrealized derivative gains
    (losses)


20,359



6,936



57,611



(31,833
)Oil and gas revenues


84,894



71,764



191,242



86,125Plant revenues


1,712



1,596



3,656



2,913Total revenues


86,606



73,360



194,898



89,038Costs and expenses:Oil and gas operating expenses


13,684



12,175



27,729



25,539Depreciation, depletion and
    amortization


23,654



24,506



47,788



44,809General and administrative expenses


2,740



4,252



7,865



7,655Total cost and expenses


40,078



40,933



83,382



78,003Operating income

$
46,528


$
32,427


$
111,516


$
11,035       b.  Gaming
      June 30,


December 31,2006


2005(Unaudited)Current assets

$
135,300


$
158,250Property, plant and equipment, net


617,064



441,059Other non-current assets


61,039



57,632Total assets

$
813,403


$
656,941Current liabilities

$
70,403


$
59,271Long term debt


280,005



217,335Other non-current liabilities


12,743



14,926Total liabilities

$
363,151


$
291,532  13




---



##### Table of Contents



Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Revenues:Casino

$
89,190


$
81,168


$
174,562


$
166,238Hotel


22,025



18,602



42,346



36,689Food and beverage


25,024



23,307



47,499



45,249Tower, retail and other income


10,000



10,241



18,757



19,118Gross revenues


146,239



133,318



283,164



267,294Less promotional allowances


11,459



10,750



21,666



22,059Net revenues


134,780



122,568



261,498



245,235Expenses:Casino


30,771



27,595



58,617



55,322Hotel


9,261



8,033



17,332



14,759Food and beverage


17,243



14,842



32,521



28,784Tower, retail and other income


4,453



4,324



8,414



8,171Selling, general and administrative


47,685



41,421



90,465



83,963Depreciation and amortization


10,244



9,361



19,671



18,580Total costs and expenses


119,657



105,576



227,020



209,579Operating income

$
15,123


$
16,992


$
34,478


$
35,656   c.  Real
    Estate
      June 30,


December 31,2006


2005(Unaudited)Rental properties:Finance leases, net

$
71,493


$
73,292Operating leases


45,681



50,012Property development


125,187



116,007Resort properties


45,990



46,383Total real estate

$
288,351


$
285,694    14




---



##### Table of Contents



Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Revenues:Rental real estate:Interest income on financing leases

$
1,715


$
1,801


$
3,450


$
3,767Rental income


2,402



2,113



4,535



4,213Property development


37,852



14,459



49,236



22,739Resort operations


7,096



7,082



13,178



12,691Total revenues


49,065



25,455



70,399



43,410Operating expenses:Rental real estate


978



1,091



2,173



2,331Property development


25,976



13,265



35,952



21,450Resort operations


7,260



7,070



13,524



13,474Total expenses


34,214



21,426



51,649



37,255Operating income

$
14,851


$
4,029


$
18,750


$
6,155   Rental
    Real Estate
      Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Properties sold


4



7



8



11Proceeds received

$
7,354


$
4,856


$
8,327


$
48,320Mortgage debt repaid

$



$



$



$
10,702Total gain recorded

$
1,308


$
2,644


$
1,559


$
15,844Gain recorded in operations

$



$



$



$
186Gain recorded in discontinued
    operations(i)

$
1,308


$
2,644


$
1,559


$
15,658     (i)
    
    A gain of $5.7 million on the sale of resort properties was
    recognized in the six months ended June 30, 2005 in
    addition to gains on the rental portfolio.  Property
    Development and Associated Resort Activities
   15




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##### Table of Contents



Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Units soldNew Seabury, Massachusetts


20



1



30



1Grand Harbor/Oak Harbor, Florida


6



5



8



11Falling Waters, Florida


9



23



9



47Westchester, New York


6



3



6



341



32



53



62RevenuesNew Seabury, Massachusetts

$
21,352


$
423


$
30,385


$
423Grand Harbor/Oak Harbor, Florida


4,123



3,250



6,444



6,673Falling Waters, Florida


2,261



4,212



2,261



9,068Westchester, New York


10,116



6,574



10,146



6,575$
37,852


$
14,459


$
49,236


$
22,739   d.  Home
    Fashion
      June 30,


December 31,2006


2005(Unaudited)Current assets

$
543,226


$
583,496Property plant and equipment, net


115,986



166,026Intangible and other assets


25,888



23,402Total assets

$
685,100


$
772,924Current liabilities

$
104,768


$
103,931Other liabilities


1,003



5,214Total liabilities

$
105,771


$
109,145     Three Months Ended


Six Months EndedJune 30, 2006


June 30, 2006Revenues

$
237,148


$
480,638Costs and expenses:Cost of sales


224,222



452,582Selling, general and administrative


40,698



84,015Restructuring and impairment
    charges


20,567



30,338Total costs and expenses


285,487



566,935Operating loss

$
(48,339
)

$
(86,297
)    16




---



##### Table of Contents



Note 5.
    Investments
    and Related Matters    June 30, 2006


December 31, 2005Carrying





CarryingCost


Value


Cost


Value(Unaudited)Current Investments:TradingMarketable equity and debt
    securities

$



$



$
33,301


$
39,232Other investments






19,000







Total current trading






19,000



33,301



39,232Available for SaleU.S. Government and agency
    obligations


3,237



3,189



3,346



3,346Marketable equity and debt
    securities


845,221



853,348



746,731



746,839Other investments


25,035



25,725



31,282



31,282Total current available for sale


873,493



882,262



781,359



781,467Total current investments

$
873,493


$
901,262


$
814,660


$
820,699Non-Current Investments:Other securities


16,324



16,324



15,964



15,964Total non-current

$
16,324


$
16,324


$
15,964


$
15,964    17




---



##### Table of Contents



Securities
    Sold Not Yet Purchased
    Margin
    Liability on Marketable Securities
    Note 6.
    Inventories,
    Net    June 30,


December 31,2006


2005(Unaudited)Raw materials and supplies

$
32,777


$
33,083Goods in process


120,742



100,337Finished goods


132,197



110,819$
285,716


$
244,239   Note 7.
    Trade,
    Notes and Other Receivables, Net    June 30,


December 31,2006


2005(Unaudited)Trade receivables  Home
    Fashion

$
152,596


$
173,050Allowance for doubtful
    accounts  Home Fashion


(8,281
)


(8,313
)Trade receivables  Oil
    and Gas


48,101



58,956Allowance for doubtful
    accounts  Oil and Gas


(4,903
)


(5,572
)Other


26,424



36,893$
213,937


$
255,014   Note 8.
    Other
    Current Assets    June 30,


December 31,2006


2005(Unaudited)Assets held for sale

$
42,116


$
49,876Restricted cash


180,025



161,210Other


61,999



76,899$
284,140


$
287,985    18




---



##### Table of Contents



Note 9.
    Property,
    Plant and Equipment    June 30,


December 31,2006


2005(Unaudited)Land

$
257,411


$
182,539Buildings and improvements


467,623



374,160Proved oil and gas properties


1,331,324



1,229,923Machinery, equipment and furniture


341,731



357,018Assets leased to others


135,694



141,997Construction in progress


91,877



69,8932,625,660



2,355,530Less accumulated depreciation,
    depletion and amortization


(808,009
)


(720,292
)Net property, plant and equipment

$
1,817,651


$
1,635,238     Note 10.
    Other
    Non-Current Assets    June 30,


December 31,2006


2005(Unaudited)Deferred taxes

$
44,592


$
51,511Deferred finance costs, net of
    accumulated amortization of $5,467 and $4,076 as of
    June 30, 2006 and December 31, 2005, respectively


30,769



29,822Restricted deposits


29,491



24,805Other


3,642



1,660$
108,494


$
107,798     Note 11.
    Other
    Non-Current Liabilities    June 30,


December 31,2006


2005(Unaudited)Asset retirement obligations (see
    Note 18)

$
42,589


$
41,228Derivative liability (see
    Note 19)


6,105



17,893Other long-term liabilities


29,057



29,964$
77,751


$
89,085  19




---



##### Table of Contents



Note 12.
    Minority
    Interests    June 30,


December 31,2006


2005(Unaudited)WPI

$
206,241


$
247,015Atlantic Coast


57,543



57,584$
263,784


$
304,599   Note 13.
    Long Term
    Debt    June 30,


December 31,2006


2005(Unaudited)Senior unsecured 7.125% notes
    due 2013  AREP

$
480,000


$
480,000Senior unsecured 8.125% notes
    due 2012  AREP


351,083



350,922Senior secured 7.85% notes
    due 2012  ACEP


215,000



215,000Borrowings under credit
    facility  ACEP


60,000



Borrowings under credit
    facility  NEG Oil & Gas


300,000



300,000Mortgages payable


113,546



81,512Other


8,259



8,387Total long-term debt


1,527,888



1,435,821Less current portion, including
    debt related to real estate held for sale


21,601



24,155$
1,506,287


$
1,411,666   Senior
    unsecured notes restrictions and covenants 
    AREP
        Senior
    secured 7.85% notes due 2012  ACEP
   20




---



##### Table of Contents



ACEP
    Senior Secured Revolving Credit Facility
        NEG
    Oil & Gas LLC Senior Secured Revolving Credit
    Facility
       21




---



##### Table of Contents



Real
    Estate Mortgages Payable
    WPI
    Secured Revolving Credit Agreement
        Note 14.
    Other
    Income (Expense)    Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Net realized gains on sales of
    marketable securities

$
22,855


$
5,009


$
56,286


$
5,009Net realized losses on securities
    sold short


(27,044
)


(10,021
)


(32,175
)


(10,021
)Unrealized gains (losses) on
    marketable securities


4,272


$
(917
)


19,750



3,105Unrealized gains (losses) on
    securities sold short


44,276



(15,395
)


18,800



2,287Other


1,763



1,504



4,932



5,752$
46,122


$
(19,820
)

$
67,593


$
6,132   Note 15.
    Unit
    Options   22




---



##### Table of Contents



Share Based Payment
  Note 16.
    Preferred
    Units    Note 17.
    Earnings
    Per Limited Partnership Unit      Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Attributable to limited partners:Basic income (loss) from
    continuing operations

$
67,983


$
(5,769
)

$
115,929


$
18,321Add preferred unit distribution(1)


1,389







2,698



Income (loss) before discontinued
    operations


69,372


$
(5,769
)


118,627



18,321Income from discontinued operations


1,713



2,972



2,485



22,009Diluted earnings (loss)

$
71,085


$
(2,797
)

$
121,112


$
40,330Weighted average LP units
    outstanding


61,857



46,271



61,857



46,185Dilutive effect of redemption of
    preferred LP units(2)


2,666







2,761



Dilutive effect of unit options










45



Weighted average LP units and
    equivalent partnership units outstanding


64,523



46,271



64,663



46,185Basic earnings:Income (loss) from continuing
    operations

$
1.10


$
(0.12
)

$
1.87


$
0.40Income from discontinued operations


0.03



0.06



0.04



0.48Basic earnings (loss) per LP unit

$
1.13


$
(0.06
)

$
1.91


$
0.88Diluted earnings:Income (loss) from continuing
    operations

$
1.08


$
(0.12
)

$
1.83


$
0.40Income from discontinued operations


0.03



0.06



0.04



0.48Diluted earnings (loss) per LP unit

$
1.11


$
(0.06
)

$
1.87


$
0.88     (1)
    
    Includes adjustment for interest expense associated with
    Preferred LP units distribution (see Note 16). 23




---



##### Table of Contents



(2)
    
    As their effect would have been anti-dilutive, 3,904,994 and
    3,788,634 units have been excluded from the weighted
    average LP units and equivalent partnership units outstanding
    for the three and six months ended June 30, 2005,
    respectively.   Note 18.
    Asset
    Retirement Obligations  Oil and Gas      June 30,


December 31,2006


2005(Unaudited)Beginning of year

$
41,228


$
56,524Add: Accretion


1,361



3,019Drilling additions






2,067Less: Revisions






(2,813
)Settlements






(431
)Dispositions






(17,138
)End of period

$
42,589


$
41,228   Note 19.
    Oil and
    Gas Derivatives    Type of Contract

Production Month

Volume Per Month

Floor

CeilingNo cost collars

July-Dec 2006

31,000 Bbls


41.65


45.25No cost collars

July-Dec 2006

16,000 Bbls


41.75


45.40No cost collars

July-Dec 2006

570,000 MMBTU


6.00


7.25No cost collars

July-Dec 2006

120,000 MMBTU


6.00


7.28No cost collars

July-Dec 2006

500,000 MMBTU


4.50


5.00No cost collars

July-Dec 2006

46,000 Bbls*


60.00


68.50No cost collars

Jan-Dec 2007

30,000 Bbls


57.00


70.50No cost collars

Jan-Dec 2007

30,000 Bbls


57.50


72.00No cost collars

Jan-Dec 2007

930,000 MMBTU


8.00


10.225No cost collars

Jan-Dec 2007

1,000 Bbls


65.00


87.40No cost collars

Jan-Dec 2007

7,000 Bbls


65.00


86.00No cost collars

Jan-Dec 2007

330,000 MMBTU


9.60


12.10No cost collars

Jan-Dec 2007

100,000 MMBTU


9.55


12.60No cost collars

Jan -Dec 2008

46,000 Bbls


55.00


69.00No cost collars

Jan-Dec 2008

750,000 MMBTU


7.00


10.35No cost collars

Jan-Dec 2008

9,000 Bbls


65.00


81.25No cost collars

Jan-Dec 2008

70,000 MMBTU


8.75


11.90No cost collars

Jan-Dec 2008

270,000 MMBTU


8.80


11.45No cost collars

Jan-Dec 2009

19,000 Bbls


65.00


78.50No cost collars

Jan-Dec 2009

26,000 Bbls


65.00


77.00No cost collars

Jan-Dec 2009

330,000 MMBTU


7.90


10.80No cost collars

Jan-Dec 2009

580,000 MMBTU


7.90


11.00  24




---



##### Table of Contents



*
    
    The company participates in a second ceiling at $84.50 on
    July-Dec 2006 46,000 Bbls swap.    Note 20.
    Segment
    Reporting     25




---



##### Table of Contents



Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Revenues:Oil and Gas

$
86,606


$
73,360


$
194,898


$
89,038Gaming


134,780



122,568



261,498



245,235Real EstateRental real estate


4,117



3,914



7,985



7,980Property development


37,852



14,459



49,236



22,739Resort operations


7,096



7,082



13,178



12,691Total real estate


49,065



25,455



70,399



43,410Home Fashion


237,148







480,638



Total revenues

$
507,599


$
221,383


$
1,007,433


$
377,683Net segment operating income
    (loss):Oil and Gas

$
46,528


$
32,427


$
111,516


$
11,035Gaming


15,123



16,992



34,478



35,656Real EstateRental real estate


3,139



2,823



5,812



5,649Property development


11,876



1,194



13,284



1,289Resort operations


(164
)


12



(346
)


(783
)Total real estate earnings


14,851



4,029



18,750



6,155Home Fashion


(48,339
)






(86,297
)


Total segment operating income
    (loss)


28,163



53,448



78,447



52,846Holding Company costs(i)


(3,675
)


(5,301
)


(14,980
)


(8,209
)Total operating income


24,488



48,147



63,467



44,637Interest expense


(31,614
)


(28,825
)


(62,202
)


(52,005
)Interest income


13,694



14,234



26,286



26,585Other income (expense), net


46,122



(19,820
)


67,593



6,132Income tax expense


(9,155
)


(9,030
)


(17,812
)


(12,436
)Minority interests


25,828



615



40,951



1,547Income from continuing operations

$
69,363


$
5,321


$
118,283


$
14,460     (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.  26




---



##### Table of Contents



Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005(Unaudited)


(Unaudited)Depreciation, depletion and
    amortization (D,D&A) by segment:Oil and Gas

$
23,654


$
24,506


$
47,788


$
44,809Gaming


10,244



9,361



19,671



18,580Real Estate:Rental real estate


416



410



832



1,030Property development


104







104



Resort operations


821



870



1,567



1,738Total real estate


1,341



1,280



2,503



2,768Home Fashion


9,534







19,898



D,D&A in operating expenses


44,773



35,147



89,860



66,157Amortization in interest expense


1,257



1,407



2,541



3,006Total D,D&A for continuing
    operations

$
46,030


$
36,554


$
92,401


$
69,163   June 30,


December 31,2006


2005(Unaudited)Assets:Oil and Gas

$
951,112


$
958,295Gaming


813,403



656,941Real Estate


485,883



442,594Home Fashion


685,100



772,924Subtotal


2,935,498



2,830,754Reconciling items (ii)


1,182,417



1,135,708Total assets

$
4,117,915


$
3,966,462     (ii)
    
    Reconciling items relate principally to cash and investments of
    the Holding Company.  Six Months EndedJune 30,2006


2005(Unaudited)Capital expenditures:Oil and Gas

$
101,614


$
134,017Gaming


25,506



13,077Rental Real Estate


32



Hotel and resort operating
    properties


1,224



1,418Home Fashion


3,008



$
131,384


$
148,512  27




---



##### Table of Contents



Note 21.
    Income
    Taxes    Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Current

$
(3,679
)

$
(2,488
)

$
(9,525
)

$
(3,841
)Deferred


(5,476
)


(6,542
)


(8,287
)


(8,595
)$
(9,155
)

$
(9,030
)

$
(17,812
)

$
(12,436
)     Note 22.
    Commitments
    and Contingencies    GB
    Holdings
      WPI
    litigation
  Contrarian Funds Inc. v. WestPoint Stevens, Inc.
    et al.
 28




---



##### Table of Contents



pro rata pro rata
    Note 23.
    Subsequent
    Events  Declaration
    of Distribution on Depositary Units
    Oil &
    Gas Property Acquisition
   29




---



##### Table of Contents



ITEM 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations        
    Consolidated Financial Results
    Oil and Gas
    Gaming
    Real Estate
    Home Fashion
    Corporate and Investments    
    Consolidated Financial Results
    Oil and Gas
    Gaming
    Real Estate
    Home Fashion   Overview  out-of-favor
     Results
    of Operations  Overview
    
    Increase in operating income of $14.1 million from Oil and
    Gas attributable primarily to an increase in unrealized gains on
    derivative positions of $13.4 million;
    Increase in operating income of $10.7 million from Real
    Estate property development attributable primarily to increased
    sales activity at our New Seabury and Westchester, New York
    properties; 30




---



##### Table of Contents




    Operating losses of $48.3 million from our Home Fashion
    segment, of which $20.5 million relates to restructuring
    costs, consisting primarily of impairment charges in connection
    with the closing of plants; offset in part by $25.7 million
    relating to the minority interests share in WPIs
    losses.
    Increase in net realized and unrealized gains on investments of
    $65.7 million.    
    Increase in operating income of $100.5 million from Oil and
    Gas attributable primarily to an increase in unrealized gains on
    derivative positions of $89.4 million, partially offset by
    an increase in realized derivative losses of $10.7 million;
    Increase in operating income of $12.0 million from Real
    Estate property development, attributable primarily to
    $30.4 million of additional sales at our New Seabury and
    Westchester, New York properties;
    Operating losses of $86.3 million from our Home Fashion
    segment, of which $30.3 million relates to restructuring
    costs, consisting primarily of impairment charges in connection
    with the closing of plants, offset in part by $40.8 million
    relating to the minority interests share in WPIs
    losses;
    Increase in Holding Company costs of $10.1 million
    principally due to a $6.2 million non-cash compensation
    charge related to the cancellation of unit options and higher
    legal and professional fees;
    Increase in net realized and unrealized gains on investments of
    $62.3 million; and
    Reduced income from discontinued operations resulting from a
    $19.9 million decline in gains on sales of net lease
    properties.  Consolidated
    Results
  Three
    months ended June 30, 2006 compared to three months ended
    June 30, 2005.
        Six
    months ended June 30, 2006 compared to six months ended
    June 30, 2005.
       31




---



##### Table of Contents



Oil
    and Gas
    Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Gross oil and gas revenues

$
71,135


$
69,662


$
152,318


$
125,925Realized derivative losses


(6,600
)


(4,834
)


(18,687
)


(7,967
)Unrealized derivative gains
    (losses)


20,359



6,936



57,611



(31,833
)Oil and gas revenues


84,894



71,764



191,242



86,125Plant revenues


1,712



1,596



3,656



2,913Total revenues


86,606



73,360



194,898



89,038Costs and expenses:Oil and gas operating expenses


13,684



12,175



27,729



25,539Depreciation, depletion and
    amortization


23,654



24,506



47,788



44,809General and administrative expenses


2,740



4,252



7,865



7,655Total cost and expenses


40,078



40,933



83,382



78,003Operating income

$
46,528


$
32,427


$
111,516


$
11,035    32




---



##### Table of Contents



Three Months


Six Months EndedEnded June 30,


June 30,2006


2005


2006


2005Production data:Oil (MBbls)


350



378



718



731Natural gas (MMcf)


7,316



6,970



14,720



12,993Natural gas liquids (MBbls)


45



95



146



186Natural gas equivalents (MMcfe)


9,688



9,810



19,904



18,492Average Sales
    Price(1):Oil average sales price (per Bbl)Price including realized gains or
    losses on derivative contracts

$
59.12


$
47.56


$
57.29


$
47.88Price excluding realized gains or
    losses on derivative contracts


70.22



51.87



66.27



51.25Natural gas average sales price
    (per Mcf)Price including realized gains or
    losses on derivative contracts


5.77



6.31



5.91



5.95Price excluding realized gains or
    losses on derivative contracts


6.14



6.77



6.74



6.38Natural gas liquids (per Bbl)


36.54



29.93



37.64



30.17Expense per Mcfe:Total oil and gas operating
    expenses

$
1.41


$
1.24


$
1.39


$
1.38Depreciation, depletion and
    amortization


2.44



2.50



2.40



2.42General and administrative expenses


.28



.43



.40



.41     (1)
    
    Excludes the effect of unrealized gains and losses on derivative
    contracts.  Three
    months ended June 30, 2006 compared to the three months
    ended June 30, 2005
  mark-to-market
       33




---



##### Table of Contents



Six
    months ended June 30, 2006 compared to the six months ended
    June 30, 2005
  mark-to-market
           34




---



##### Table of Contents



Gaming
    Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005RevenuesCasino

$
89,190


$
81,168


$
174,562


$
166,238Hotel


22,025



18,602



42,346



36,689Food and beverage


25,024



23,307



47,499



45,249Tower, retail and other income


10,000



10,241



18,757



19,118Gross revenues


146,239



133,318



283,164



267,294Less promotional allowances


11,459



10,750



21,666



22,059Net revenues


134,780



122,568



261,498



245,235ExpensesCasino


30,771



27,595



58,617



55,322Hotel


9,261



8,033



17,332



14,759Food and beverage


17,243



14,842



32,521



28,784Other operating expenses


4,453



4,324



8,414



8,171Selling, general and administrative


47,685



41,421



90,465



83,963Depreciation and amortization


10,244



9,361



19,671



18,580119,657



105,576



227,020



209,579Operating income

$
15,123


$
16,992


$
34,478


$
35,656     Three
    months ended June 30, 2006 compared to three months ended
    June 30, 2005
         35




---



##### Table of Contents



Six
    months ended June 30, 2006 compared to six months ended
    June 30, 2005
               36




---



##### Table of Contents



Results
    by Location
    Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Net revenues:Nevada

$
93,124


$
81,509


$
179,069


$
164,347Atlantic City


41,656



41,059



82,429



80,888Total gaming

$
134,780


$
122,568


$
261,498


$
245,235Operating income (loss):Nevada

$
14,681


$
17,757


$
33,304


$
37,797Atlantic City


442



(765
)


1,174



(2,141
)Total gaming

$
15,123


$
16,992


$
34,478


$
35,656     Real
    Estate
    Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Revenues:Rental real estate:Interest income on financing leases

$
1,715


$
1,801


$
3,450


$
3,767Rental income


2,402



2,113



4,535



4,213Property development


37,852



14,459



49,236



22,739Resort operations


7,096



7,082



13,178



12,691Total revenues


49,065



25,455



70,399



43,410Operating expenses:Rental real estate


978



1,091



2,173



2,331Property development


25,976



13,265



35,952



21,450Resort operations


7,260



7,070



13,524



13,474Total expenses


34,214



21,426



51,649



37,255Operating income

$
14,851


$
4,029


$
18,750


$
6,155  37




---



##### Table of Contents



Rental
    Real Estate
    Three Months EndedJune 30,


Six Month  Ended June 30,2006


2005


2006


2005Properties sold


4



7



8



11Proceeds received

$
7,354


$
4,856


$
8,327


$
48,320Mortgage debt repaid

$



$



$



$
10,702Total gain recorded

$
1,308


$
2,644


$
1,559


$
15,844Gain recorded in operations

$



$



$



$
186Gain recorded in discontinued
    operations(i)

$
1,308


$
2,644


$
1,559


$
15,658     (i)
    
    A gain of $5.7 million on the sale of resort properties was
    recognized in the six months ended June 30, 2005 in
    addition to gains on the rental portfolio.  Three
    months ended June 30, 2006 compared to the three months
    ended June 30, 2005
    Six
    months ended June 30, 2006 compared to the six months ended
    June 30, 2005
    Property
    Development
    Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005(Unaudited)Units soldNew Seabury, Massachusetts


20



1



30



1Grand Harbor/Oak Harbor, Florida


6



5



8



11Falling Waters, Florida


9



23



9



47Westchester, New York


6



3



6



341



32



53



62RevenuesNew Seabury, Massachusetts

$
21,352


$
423


$
30,385


$
423Grand Harbor/Oak Harbor, Florida


4,123



3,250



6,444



6,673Falling Waters, Florida


2,261



4,212



2,261



9,068Westchester, New York


10,116



6,574



10,146



6,575$
37,852


$
14,459


$
49,236


$
22,739  38




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##### Table of Contents



Three
    months ended June 30, 2006 compared to the three months
    ended June 30, 2005
      Six
    months ended June 30, 2006 compared to the six months ended
    June 30, 2005
        Resort
    Activities
  Three
    months ended June 30, 2006 compared to the three months
    ended June 30, 2005
    Six
    months ended June 30, 2006 compared to the six months ended
    June 30, 2005
    Home
    Fashion
     39




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##### Table of Contents



Results
    of Operations    Three Months Ended


Six Months EndedJune 30, 2006


June 30, 2006Revenues

$
237,148


$
480,638Costs and expenses:Cost of sales


224,222



452,582Selling, general and administrative


40,698



84,015Restructuring and impairment
    charges


20,567



30,338Total costs and expenses


285,487



566,935Operating loss

$
(48,339
)

$
(86,297
)     Three
    months ended June 30, 2006
        Six
    months ended June 30, 2006
         40




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##### Table of Contents



Holding
    Company
  Investment
    Activities
    General
    and Administrative Expenses
    Three
    months ended June 30, 2006 compared to the three months
    ended June 30, 2005
    Six
    months ended June 30, 2006 compared to the six months ended
    June 30, 2005
    Share Based
    Payment,
  Interest
    Income and Expense
  Three
    months ended June 30, 2006 compared to the three months
    ended June 30, 2005
    Six
    months ended June 30, 2006 compared to the six months ended
    June 30, 2005
    Other
    Income (Expense), net
   41




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##### Table of Contents



Minority
    Interests
    Effective
    Income Tax Rate
      Seasonality
   Liquidity
    and Capital Resources  Consolidated
    Financial Results
       42




---



##### Table of Contents



Cash
    Flows
      Borrowings
  Long-term
    debt consists of the following (in $000s):
  June 30,


December 31,2006


2005(Unaudited)Senior unsecured 7.125% notes
    due 2013  AREP

$
480,000


$
480,000Senior unsecured 8.125% notes
    due 2012  AREP


351,083



350,922Senior secured 7.85% notes
    due 2012  ACEP


215,000



215,000Borrowings under credit
    facility  ACEP


60,000



Borrowings under credit
    facility  NEG Oil & Gas


300,000



300,000Mortgages payable


113,546



81,512Other


8,259



8,387Total long-term debt


1,527,888



1,435,821Less current portion, including
    debt related to real estate held for sale


21,601



24,155$
1,506,287


$
1,411,666   Senior
    unsecured notes restrictions and covenants 
    AREP
   43




---



##### Table of Contents



Senior
    secured 7.85% notes due 2012  ACEP
    ACEP
    Senior Secured Revolving Credit Facility
       44




---



##### Table of Contents



NEG
    Oil & Gas LLC Senior Secured Revolving Credit
    Facility
        Real
    Estate Mortgages Payable
    WPI
    Secured Revolving Credit Agreement
       45




---



##### Table of Contents



Quarterly
    Distribution
      Contractual
    Commitments
  Form 10-K,
  Derivative
    Obligations
    Off
    Balance Sheet Arrangements
    Segment
    Liquidity and Capital Resources
  Oil
    and Gas
          Form S-1. Form S-1
 46




---



##### Table of Contents



Form S-4. Form S-1.
  Gaming
        Real
    Estate
      Home
    Fashion
       47




---



##### Table of Contents



Forward
    Looking Statements
     Certain
    Trends and Uncertainties  Form 10-K,
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk  Form 10-K/A
          Item 4.
    Controls
    and Procedures  Rule 13a-15(e) 15d-15(e).
 48




---



##### Table of Contents



Changes
    in Internal Control Over Financial Reporting
   PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings    GB
    Holdings
      WPI
    litigation
  Contrarian Funds Inc. v. WestPoint Stevens, Inc.
    et al.
 49




---



##### Table of Contents



pro rata pro rata
    Item 1A.
    Risk
    Factors  Form 10-K
  Home
    Fashion
  A recent court order may result in our ownership of WPI
    being reduced to less than 50%. Uncertainties arising from this
    decision may adversely affect WPIs operations and
    prospects and the value of our investment in it.
  Contrarian Funds Inc. v. WestPoint Stevens, Inc.
    et al. pro rata pro rata
 50




---



##### Table of Contents



We cannot guarantee that we will be able to recover our
    investment made in connection with the acquisition of the
    Flamingo Laughlin and we may have difficulties combining the
    operations of the Flamingo Laughlin with our existing
    operations.
        Item 6.
    Exhibits  Regulation S-K
 51




---



##### Table of Contents



SIGNATURES      
  By:
    /s/  HILLEL
    MOERMAN  Hillel Moerman
     52




---



##### Table of Contents



Exhibits Index
  Exhibit No.

DescriptionExhibit 10
.1 -

Amended and Restated Credit
    Agreement, dated as of May 9, 2006, among American
    Casino & Entertainment Properties LLC, Bear Stearns
    Corporate Lending Inc., as Administrative Agent, Wells Fargo
    Bank, as Syndication Agent, CIT Services Corporation and
    Comerica West Incorporated as Co- Documentation Agents, and
    other lender parties thereto (incorporated by reference to
    Exhibit 10.1 to American Real Estate Partners, L.P.s
    Form 8-K
    (SEC File
    No. 1-9156),
    filed on May 17, 2006).Exhibit 10
.2 -

Reaffirmation Agreement, dated as
    of May 9, 2006, among the Grantors thereto and Bear Sterns
    Corporate Lending Inc., as Administrative Agent (incorporated by
    reference to Exhibit 10.2 to American Real Estate Partners,
    L.P.s
    Form 8-K
    (SEC File
    No. 1-9156),
    filed on May 17, 2006).Exhibit 10
.3 -

First Modification to Deed of
    Trust, Assignment of Rents and Leases, Security Agreement and
    Fixture Filing made by Stratosphere Corporation, as Trustor, to
    Lawyers Title of Nevada, as Trustee, for the benefit of
    Wilmington Trust Company, in its capacity as Indenture Trustee,
    for the benefit of the Secured Parties, as Beneficiary, dated as
    of May 9, 2006 (incorporated by reference to
    Exhibit 10.3 to American Real Estate Partners, L.P.s
    Form 8-K
    (SEC File
    No. 1-9156),
    filed on May 17, 2006).Exhibit 10
.4 -

First Modification to Deed of
    Trust, Assignment of Rents and Leases, Security Agreement and
    Fixture Filing made by Stratosphere Corporation, as Trustor, to
    Lawyers Title of Nevada, as Trustee, for the benefit of Bear
    Sterns Corporate Lending Inc., in its capacity as Administrative
    Agent, for the benefit of the Secured Parties, as Beneficiary,
    dated as of May 9, 2006 (incorporated by reference to
    Exhibit 10.4 to American Real Estate Partners, L.P.s
    Form 8-K
    (SEC File
    No. 1-9156),
    filed on May 17, 2006).Exhibit 10
.5 -

First Modification to Deed of
    Trust, Assignment of Rents and Leases, Security Agreement and
    Fixture Filing made by Stratosphere Land Corporation, as
    Trustor, to Lawyers Title of Nevada, as Trustee, for the benefit
    of Bear Sterns Corporate Lending Inc., in its capacity as
    Administrative Agent, for the benefit of the Secured Parties, as
    Beneficiary, dated as of May 9, 2006 (incorporated by
    reference to Exhibit 10.5 to American Real Estate Partners,
    L.P.s
    Form 8-K
    (SEC File
    No. 1-9156),
    filed on May 17, 2006).Exhibit 10
.6 -

First Modification to Deed of
    Trust, Assignment of Rents and Leases, Security Agreement and
    Fixture Filing made by Fresca, LLC, as Trustor, to Lawyers Title
    of Nevada, as Trustee, for the benefit of Bear Sterns Corporate
    Lending Inc., in its capacity as Administrative Agent, for the
    benefit of the Secured Parties, as Beneficiary, dated as of
    May 9, 2006 (incorporated by reference to Exhibit 10.6
    to American Real Estate Partners, L.P.s
    Form 8-K
    (SEC File
    No. 1-9156),
    filed on May 17, 2006).Exhibit 10
.7 -

First Modification to Deed of
    Trust, Assignment of Rents and Leases, Security Agreement and
    Fixture Filing made by Arizona Charlies, LLC, as Trustor,
    to Lawyers Title of Nevada, as Trustee, for the benefit of Bear
    Sterns Corporate Lending Inc., in its capacity as Administrative
    Agent, for the benefit of the Secured Parties, as Beneficiary,
    dated as of May 9, 2006 (incorporated by reference to
    Exhibit 10.7 to American Real Estate Partners, L.P.s
    Form 8-K
    (SEC File
    No. 1-9156),
    filed on May 17, 2006).Exhibit 10
.8 -

Loan and Security Agreement, dated
    as of June 16, 2006, among WestPoint Home, Inc., as the
    Borrower, the Lenders from time to time party thereto, and Bank
    of America, N.A., as the Administrative Agent (incorporated by
    reference to Exhibit 10.1 to American Real Estate Partners,
    L.P.s
    Form 8-K
    (SEC File
    No. 1-9156),
    filed on June 22, 2006).Exhibit 31
.1 -

Certification of Chief Executive
    Officer pursuant to Securities Exchange Act Rule 13a-14(a).Exhibit 31
.2 -

Certification of Chief Financial
    Officer pursuant to Securities Exchange Act Rule 13a-14(a).Exhibit 32
.1 -

Certification of Principal
    Executive Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.Exhibit 32
.2 -

Certification of Principal
    Financial Officer pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002.  53