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<SEC-DOCUMENT>0001144204-07-032935.txt : 20070621
<SEC-HEADER>0001144204-07-032935.hdr.sgml : 20070621
<ACCEPTANCE-DATETIME>20070621114131
ACCESSION NUMBER:		0001144204-07-032935
CONFORMED SUBMISSION TYPE:	S-4
PUBLIC DOCUMENT COUNT:		9
FILED AS OF DATE:		20070621
DATE AS OF CHANGE:		20070621

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERICAN REAL ESTATE PARTNERS L P
		CENTRAL INDEX KEY:			0000813762
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS FABRICATED TEXTILE PRODUCTS [2390]
		IRS NUMBER:				133398766
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-4
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-143929
		FILM NUMBER:		07932979

	BUSINESS ADDRESS:	
		STREET 1:		767 FIFTH AVENUE
		STREET 2:		SUITE 4700
		CITY:			NEW YORK,
		STATE:			NY
		ZIP:			10153
		BUSINESS PHONE:		(212) 702-4300

	MAIL ADDRESS:	
		STREET 1:		767 FIFTH AVENUE
		STREET 2:		SUITE 4700
		CITY:			NEW YORK,
		STATE:			NY
		ZIP:			10153

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERICAN REAL ESTATE HOLDINGS L P
		CENTRAL INDEX KEY:			0001034563
		STANDARD INDUSTRIAL CLASSIFICATION:	OPERATORS OF NONRESIDENTIAL BUILDINGS [6512]
		IRS NUMBER:				133398767
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-4
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-143929-02
		FILM NUMBER:		07932981

	BUSINESS ADDRESS:	
		STREET 1:		445 HAMILTON AVENUE
		STREET 2:		SUITE 1210
		CITY:			WHITE PLAINS
		STATE:			NY
		ZIP:			10601
		BUSINESS PHONE:		914-614-7000

	MAIL ADDRESS:	
		STREET 1:		445 HAMILTON AVENUE
		STREET 2:		SUITE 1210
		CITY:			WHITE PLAINS
		STATE:			NY
		ZIP:			10601

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			American Real Estate Finance Corp.
		CENTRAL INDEX KEY:			0001297337
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-4
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-143929-01
		FILM NUMBER:		07932980

	BUSINESS ADDRESS:	
		STREET 1:		100 SOUTH BEDFORD ROAD
		CITY:			MT. KISCO
		STATE:			NY
		ZIP:			10549
		BUSINESS PHONE:		914-242-7700

	MAIL ADDRESS:	
		STREET 1:		100 SOUTH BEDFORD ROAD
		CITY:			MT. KISCO
		STATE:			NY
		ZIP:			10549
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-4
<SEQUENCE>1
<FILENAME>v077571s4.htm
<TEXT>
<html>
  <head>
    <title>
</title>
</head>
  <body style="FONT-SIZE: 10pt; COLOR: #000000; LINE-HEIGHT: 12pt; FONT-FAMILY: Times New Roman">
    <div style="MARGIN: 0pt" align="center"><font style="FONT-FAMILY: Times New Roman" color="#000000"><strong>As
      filed with the Securities and Exchange Commission on
      June 21, 2007</strong></font></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; PADDING-BOTTOM: 3pt; BORDER-BOTTOM: #000000 12pt double" align="right"><strong>Registration
      No.
      333-&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</strong></div>
    <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>UNITED
      STATES<br>SECURITIES AND EXCHANGE COMMISSION</strong></div>
    <div style="MARGIN: 0pt" align="center"><strong>Washington, D.C.
      20549</strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center"><strong>FORM
      S-4</strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center"><strong>REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT OF
      1933</strong></div>
    <div style="MARGIN-TOP: 15pt; FONT-SIZE: 15pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 17pt" align="center"><strong>AMERICAN
      REAL ESTATE PARTNERS, L.P.</strong></div>
    <div style="MARGIN-TOP: 0pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 4pt; LINE-HEIGHT: 10pt" align="center">(Exact
      name of co-registrant as specified in its charter)</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="149">
            </td>
            <td width="17">
            </td>
            <td width="134">
            </td>
            <td width="17">
            </td>
            <td width="105">
            </td>
            <td width="42">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="199">
              <div style="PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9pt" align="center"><strong>Delaware</strong></div>
            </td>
            <td valign="bottom" width="23">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 9pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="178">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 9pt" align="center"><strong>6512</strong></div>
            </td>
            <td valign="bottom" width="23">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 9pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="141">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 9pt" align="center"><strong>13-3398766</strong></div>
            </td>
            <td valign="top" width="57">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 9pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="199">
              <div style="PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9pt" align="center">(State
                or Other Jurisdiction of <br>Incorporation or
                Organization)</div>
            </td>
            <td valign="bottom" width="23">&#160;</td>
            <td valign="bottom" width="178">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 9pt" align="center">(Primary
                Standard Industrial <br>Classification Code
                Number)</div>
            </td>
            <td valign="bottom" width="23">&#160;</td>
            <td valign="bottom" width="141">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 9pt" align="center">(I.R.S.
                Employer <br>Identification Number)</div>
            </td>
            <td valign="top" width="57">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 1.75pt; FONT-SIZE: 10.5pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 12.5pt; FONT-FAMILY: Times New Roman Bold" align="center"><font style="FONT-FAMILY: Times New Roman Bold"><strong>______________</strong></font></div>
    <div style="MARGIN-TOP: 12.5pt; FONT-SIZE: 15pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 17pt" align="center"><font style="FONT-FAMILY: Times New Roman"><strong>AMERICAN
      REAL
      ESTATE FINANCE CORP.</strong></font></div>
    <div style="MARGIN-TOP: 0pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 4pt; LINE-HEIGHT: 10pt" align="center">(Exact
      name of co-registrant as specified in its charter)</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="150">
            </td>
            <td width="16">
            </td>
            <td width="135">
            </td>
            <td width="16">
            </td>
            <td width="106">
            </td>
            <td width="43">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="200">
              <div style="PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="center"><strong>Delaware</strong></div>
            </td>
            <td valign="bottom" width="21">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="180">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>6512</strong></div>
            </td>
            <td valign="bottom" width="21">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="142">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>20-1059842</strong></div>
            </td>
            <td valign="top" width="57">
              <div style="MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="200">
              <div style="PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8pt" align="center">(State
                or Other Jurisdiction of <br>Incorporation or
                Organization)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="180">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 8pt" align="center">(Primary
                Standard Industrial <br>Classification Code
                Number)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="142">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 8pt" align="center">(I.R.S.
                Employer <br>Identification Number)</div>
            </td>
            <td valign="top" width="57">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 1.75pt; FONT-SIZE: 10.5pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 12.5pt; FONT-FAMILY: Times New Roman Bold" align="center"><font style="FONT-FAMILY: Times New Roman Bold"><strong>______________</strong></font></div>
    <div style="MARGIN-TOP: 12.5pt; FONT-SIZE: 15pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 17pt" align="center"><font style="FONT-FAMILY: Times New Roman"><strong>AMERICAN
      REAL
      ESTATE HOLDINGS LIMITED PARTNERSHIP</strong></font></div>
    <div style="MARGIN-TOP: 0pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 4pt; LINE-HEIGHT: 10pt" align="center">(Exact
      name of registrant of guarantee as specified in its
      charter)</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="150">
            </td>
            <td width="16">
            </td>
            <td width="135">
            </td>
            <td width="16">
            </td>
            <td width="106">
            </td>
            <td width="43">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="200">
              <div style="PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="center"><strong>Delaware</strong></div>
            </td>
            <td valign="bottom" width="21">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="180">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>6512</strong></div>
            </td>
            <td valign="bottom" width="21">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="142">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>13-3398767</strong></div>
            </td>
            <td valign="top" width="57">
              <div style="MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="200">
              <div style="PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8pt" align="center">(State
                or Other Jurisdiction of <br>Incorporation or
                Organization)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="180">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 8pt" align="center">(Primary
                Standard Industrial <br>Classification Code
                Number)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="142">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 8pt" align="center">(I.R.S.
                Employer <br>Identification Number)</div>
            </td>
            <td valign="top" width="57">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 4pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>767
      Fifth Avenue, Suite 4700<br>New York, New York
      10153<br>(212) 702-4300<br></strong>(Address, Including Zip Code, and Telephone
      Number,<br>Including Area Code, of Registrants&#8217; Principal Executive
      Offices)</div>
    <div style="MARGIN-TOP: 5.35pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Keith
      A. Meister<br>Principal Executive Officer and Vice
      Chairman of the Board<br>767 Fifth Avenue, Suite 4700<br>New York, New York
      10153<br></strong>(Name, Address, Including Zip Code, and Telephone
      Number,<br>Including Area Code, of Agent For Service)</div>
    <div style="MARGIN-TOP: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="center">Copies
      to:</div>
    <div style="MARGIN-TOP: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Julie
      M. Allen, Esq.<br>Proskauer Rose LLP<br>1585
      Broadway<br>New York, New York 10036<br>Telephone: (212) 969-3000<br>Facsimile:
      (212) 969-2900</strong></div>
    <div style="MARGIN-TOP: 4.5pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 10pt"><strong>Approximate
      date of commencement of the proposed sale to the public:</strong> As soon as
      practicable after the effective date of this Registration Statement.</div>
    <div style="MARGIN-TOP: 3pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 10pt">If
      the securities being registered on this form are being offered in connection
      with the formation of a holding company and there is compliance with General
      Instruction G, check the following box.&#160;&#160;<font style="FONT-FAMILY: Wingdings">&#168;</font></div>
    <div style="MARGIN-TOP: 3pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 10pt">If
      this form is filed to register additional securities for an offering pursuant
      to
      Rule 462(b) under the Securities Act of 1933, check the following box and list
      the Securities Act registration statement number of the earlier effective
      registration statement for the same offering.&#160;&#160;<font style="FONT-FAMILY: Wingdings">&#168;</font></div>
    <div style="MARGIN-TOP: 3pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 10pt">If
      this form is a post-effective amendment filed pursuant to Rule 462(d) under
      the
      Securities Act of 1933, check the following box and list the Securities Act
      registration statement number of the earlier effective registration statement
      for the same offering.&#160;&#160;<font style="FONT-FAMILY: Wingdings">&#168;</font></div>
    <div style="PADDING-BOTTOM: 3pt; MARGIN: 0pt; BORDER-BOTTOM: #000000 12pt double"><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt; PAGE-BREAK-BEFORE: always" align="center"><strong>CALCULATION
      OF REGISTRATION FEE</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="158">
            </td>
            <td width="12">
            </td>
            <td width="70">
            </td>
            <td width="12">
            </td>
            <td width="63">
            </td>
            <td width="12">
            </td>
            <td width="75">
            </td>
            <td width="10">
            </td>
            <td width="54">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="211" style="border-top: #000000 2pt double; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt"><strong>Title&#160;of&#160;Each
                Class&#160;of<br>Securities&#160;to&#160;be&#160;Registered</strong></div>
            </td>
            <td valign="bottom" width="16" style="border-top: #000000 2pt double;">&#160;</td>
            <td valign="bottom" width="94" style="border-top: #000000 2pt double; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Amount&#160;to&#160;be<br>Registered(1)</strong></div>
            </td>
            <td valign="bottom" width="16" style="border-top: #000000 2pt double;">&#160;</td>
            <td valign="bottom" width="84" style="border-top: #000000 2pt double; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Proposed<br>Maximum<br>Offering&#160;Price<br>Per&#160;Note(1)</strong></div>
            </td>
            <td valign="bottom" width="16" style="border-top: #000000 2pt double;">&#160;</td>
            <td valign="bottom" width="100" style="border-top: #000000 2pt double; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Proposed<br>Maximum<br>Aggregate<br>Offering&#160;Price(1)</strong></div>
            </td>
            <td valign="bottom" width="13" style="border-top: #000000 2pt double;">&#160;</td>
            <td valign="bottom" width="72" style="border-top: #000000 2pt double; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Amount&#160;of<br>Registration<br>Fee(2)</strong></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="211">&#160;</td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="94">&#160;</td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="84">&#160;</td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="100">&#160;</td>
            <td valign="bottom" width="13">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="72">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="211">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">7
                1/8% Senior Notes due 2013</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="94">
              <div style="MARGIN: 0pt" align="center">$500,000,000</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="84">
              <div style="MARGIN: 0pt" align="center">100%</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="100">
              <div style="MARGIN: 0pt" align="center">$500,000,000</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="72">
              <div style="MARGIN: 0pt" align="center">$15,113.43</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="211" style="border-bottom: #000000 2pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Guarantee(3)</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #000000 2pt double;">&#160;</td>
            <td valign="bottom" width="94" style="border-bottom: #000000 2pt double;">
              <div style="MARGIN: 0pt" align="center">&#8212;</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #000000 2pt double;">&#160;</td>
            <td valign="bottom" width="84" style="border-bottom: #000000 2pt double;">
              <div style="MARGIN: 0pt" align="center">&#8212;</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #000000 2pt double;">&#160;</td>
            <td valign="bottom" width="100" style="border-bottom: #000000 2pt double;">
              <div style="MARGIN: 0pt" align="center">&#8212;</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #000000 2pt double;">&#160;</td>
            <td valign="bottom" width="72" style="border-bottom: #000000 2pt double;">
              <div style="MARGIN: 0pt" align="center">&#8212;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 2.5pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">(1)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 2.5pt">Estimated
      solely for the purpose of calculating the registration fee pursuant to Rule
      457
      under the Securities Act of 1933, as amended.</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">(2)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 2.5pt">Pursuant
      to Rule 457(f)(2) of the Securities Act of 1933, as amended, the registration
      fee has been estimated based on the book value, as of March 31, 2007, of
      $492,294,000 of the private notes to be received by the registrant in exchange
      for the new notes to be issued hereunder in the exchange offer described
      herein.</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">(3)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 2.5pt">Pursuant
      to Rule 457(n) under the Securities Act, no separate fee is payable with respect
      to the guarantee.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><strong>The Registrants
      hereby amend this Registration Statement on such date or dates as may be
      necessary to delay its effective date until the Registrants shall file a further
      amendment that specifically states that this Registration Statement shall
      thereafter become effective in accordance with Section 8(a) of the Securities
      Act of 1933, as amended, or until this Registration Statement shall become
      effective on such date as the Securities and Exchange Commission, acting
      pursuant to said Section 8(a), determines.</strong></div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 7.5pt; FONT-SIZE: 7.5pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always; COLOR: #ff0000; LINE-HEIGHT: 9.5pt; FONT-FAMILY: Arial"><font style="FONT-FAMILY: Arial" color="#ff0000">The
      information in this Preliminary
      Prospectus is not complete and may be changed. We may not exchange these
      securities until the Registration Statement filed with the Securities and
      Exchange Commission is effective. This Preliminary Prospectus is not an offer
      to
      exchange these securities and is not soliciting offers to exchange these
      securities in any State where the exchange is not permitted.</font></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="468">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="624">
              <div style="MARGIN: 0pt; COLOR: #ff0000" align="center"><font style="FONT-FAMILY: Times New Roman"><strong>SUBJECT
                TO COMPLETION, DATED
                JUNE 21, 2007</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="468">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="624">
              <div style="MARGIN: 0pt; COLOR: #ff0000" align="center"><strong>PROSPECTUS</strong></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 30pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 14pt" align="center"><font color="#000000"><strong>$500,000,000</strong></font></div>
    <div style="MARGIN-TOP: 12pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 14pt" align="center"><strong>AMERICAN
      REAL ESTATE PARTNERS, L.P.</strong></div>
    <div style="MARGIN-TOP: 12pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 14pt" align="center"><strong>AMERICAN
      REAL ESTATE FINANCE CORP.</strong></div>
    <div style="MARGIN-TOP: 12pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt" align="center"><strong>OFFER
      TO EXCHANGE OUR 7 1/8% SENIOR NOTES DUE 2013, WHICH
      HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, FOR ANY AND ALL OF OUR
      OUTSTANDING 7 1/8% SENIOR NOTES DUE 2013</strong></div>
    <div style="MARGIN-TOP: 5.25pt; FONT-SIZE: 10.5pt; MARGIN-BOTTOM: 10.5pt; LINE-HEIGHT: 12.5pt" align="center"><strong>_________________</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>MATERIAL
      TERMS OF THE EXCHANGE OFFER</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We are
      jointly and severally offering to exchange, upon the terms and subject to the
      conditions set forth in this prospectus and the accompanying letter of
      transmittal (which together constitute the exchange offer), $500,000,000 in
      aggregate principal amount of our 7 1/8% senior exchange notes due 2013, or
      the
      new notes, for $500,000,000 in aggregate principal amount of our issued and
      outstanding 7 1/8% senior notes due 2013, or the private notes, and,
      collectively with the new notes, the notes.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 54pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">The
      terms of the new notes are
      substantially identical to the private notes, except that the transfer
      restrictions and registration rights relating to the private notes will not
      apply to the new notes and the new notes will not provide for the payment of
      liquidated damages under circumstances related to the timing and completion
      of
      the exchange offer.</font></div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 54pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">Expires
      5:00 p.m., New York City time, on
&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
      2007, unless extended.</font></div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 54pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">Subject
      to the satisfaction or waiver of
      specified conditions, we will exchange your validly tendered unregistered
      private notes that have not been withdrawn prior to the expiration of the
      exchange offer for an equal principal amount of new notes which have been
      registered under the Securities Act of 1933, as amended, or the Securities
      Act.</font></div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 54pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">The
      exchange offer is not subject to any
      condition other than that the exchange offer not violate applicable law or
      any
      applicable interpretation of the staff of the Securities and Exchange
      Commission, or the SEC, and other customary conditions.</font></div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 54pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">You
      may withdraw your tender of notes at
      any time before the exchange offer expires.</font></div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 54pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">The
      exchange of notes should not be a
      taxable exchange for U.S. federal income tax purposes.</font></div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 54pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">We
      will not receive any proceeds from the
      exchange offer.</font></div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 54pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">The
      new notes will not be traded on any
      national securities exchange and, therefore, we do not anticipate that an active
      public market in the new notes will develop.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><strong>Please
      refer to &#8220;Risk Factors&#8221; beginning on page 7 of this document for certain
      important information.</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><strong>Neither
      the Securities and Exchange Commission nor any state securities commission
      has
      approved or disapproved of the notes to be issued in the exchange offer or
      passed upon the adequacy or accuracy of this prospectus. Any representation
      to
      the contrary is a criminal offense.</strong></div>
    <div style="MARGIN-TOP: 16.65pt; MARGIN-BOTTOM: 0pt" align="center">The date
      of
      this prospectus
&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
      2007</div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt" align="center"><br><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt; PAGE-BREAK-BEFORE: always" align="center"><strong><a name="toc"></a>TABLE
  OF CONTENTS</strong></div>
    <div>

  <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">
    <tr>
      <td width="430"> </td>
      <td width="14"> </td>
      <td width="23"> </td>
    </tr>
    <tr>
      <td valign="bottom" width="573">&#160;</td>
      <td valign="top" width="19">&#160;</td>
      <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
        <div style="MARGIN: 0pt" align="center"><strong>Page</strong></div></td>
    </tr>
    <tr>
      <td valign="bottom" width="573">&#160;</td>
      <td valign="top" width="19"> <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div></td>
      <td valign="bottom" width="30">&#160;</td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><a href="#1">About
          This Prospectus</a></div></td>
      <td valign="top" width="19">&nbsp;</td>
      <td valign="bottom" width="30"> <div style="MARGIN: 0pt" align="right"><a href="#1">ii</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#2">Forward-Looking
          Statements</a></div></td>
      <td valign="top" width="19">&nbsp;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#2">iii</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#3">Summary</a></div></td>
      <td valign="top" width="19">&nbsp;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#3">1</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#4">Risk
          Factors</a></div></td>
      <td valign="top" width="19">&nbsp;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#4">7</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#5">Use
          of Proceeds</a></div></td>
      <td valign="top" width="19">&nbsp;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#5">20</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#6">The
          Exchange Offer</a></div></td>
      <td valign="top" width="19">&nbsp;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#6">21</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#7">Selected
          Consolidated Financial Data</a></div></td>
      <td valign="top" width="19">&#160;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#7">29</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#8">Unaudited
          Pro Forma Condensed Combined Financial Statements</a></div></td>
      <td valign="top" width="19">&#160;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#8">31</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#9">Description
          of Notes</a></div></td>
      <td valign="top" width="19">&#160;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#9">41</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#10">Certain
          Material U.S. Federal Income Tax Consequences</a></div></td>
      <td valign="top" width="19">&#160;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#10">71</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#11">Plan
          of Distribution</a></div></td>
      <td valign="top" width="19">&#160;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#11">75</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#12">Legal
          Matters</a></div></td>
      <td valign="top" width="19">&#160;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#12">76</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#13">Experts</a></div></td>
      <td valign="top" width="19">&#160;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#13">76</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#14">Where
          You Can Find More Information</a></div></td>
      <td valign="top" width="19">&#160;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#14">76</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#15">Incorporation
          of Certain Documents By Reference</a></div></td>
      <td valign="top" width="19">&#160;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#15">78</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="573"> <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#16">Index
          To Financial Statements</a></div></td>
      <td valign="top" width="19">&#160;</td>
      <td valign="bottom" width="30"> <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="right"><a href="#16">F-1</a></div></td>
    </tr>
  </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">i</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>

  <p><strong><a name="1"></a>ABOUT THIS PROSPECTUS</strong></p>
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">This
      prospectus is part of a registration statement that we have filed with the
      SEC.
      This prospectus does not contain all of the information included in the
      registration statement. The registration statement filed with the SEC includes
      exhibits that provide more details about the matters discussed in this
      prospectus. You should carefully read this prospectus, the related exhibits
      filed with the SEC and any prospectus supplement, together with the additional
      information described below under the headings &#8220;Where You Can Find More
      Information&#8221; and &#8220;Incorporation by Reference.&#8221; This prospectus incorporates
      important business and financial information about us that is not included
      in or
      delivered with this prospectus. We will provide without charge to each person
      to
      whom a copy of this prospectus is delivered, upon written or oral request of
      that person, a copy of any and all of this information. Requests for copies
      should be directed to Investor Relations Department, American Real Estate
      Partners, L.P., 769&#160;Fifth Avenue, Suite 4700, New York, New York 10153;
      (212) 702-4300. Our web site address is http://www.AREP.com. You should request
      this information at least five business days in advance of the date on which
      you
      expect to make your decision with respect to the exchange offer.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><strong>In
      any
      event, in order to obtain timely delivery, you must request this information
      prior to
&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
      2007, which is five business days before the expiration date of the exchange
      offer.</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">You
      should rely only on the information contained or incorporated by reference
      in
      this prospectus and in any accompanying prospectus supplement. We have not
      authorized any other person to provide you with different information. If anyone
      provides you with different or inconsistent information, you should not rely
      on
      it. You should assume that the information appearing in this prospectus, any
      prospectus supplement and any other document incorporated by reference is
      accurate only as of the date on the front cover of those documents. We do not
      imply that there has been no change in the information contained in this
      prospectus or in our affairs since that date by delivering this
      prospectus.</div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTICE
      TO UNITED KINGDOM RESIDENTS</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">THE NOTES
      WILL NOT BE OFFERED OR SOLD TO PERSONS IN THE UNITED KINGDOM, EXCEPT TO PERSONS
      WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING OR
      DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR
      BUSINESSES OR OTHERWISE IN CIRCUMSTANCES WHICH HAVE NOT RESULTED AND WILL NOT
      RESULT IN AN OFFER TO THE PUBLIC IN THE UNITED KINGDOM WITHIN THE MEANING OF
      THE
      PUBLIC OFFERS OF SECURITIES REGULATIONS 1995. THIS OFFERING MEMORANDUM MAY
      ONLY
      BE ISSUED OR PASSED ON, IN OR INTO THE UNITED KINGDOM TO A PERSON WHO IS OF
      A
      KIND DESCRIBED IN ARTICLE 11(3) OF THE FINANCIAL SERVICES ACT 1986 (INVESTMENT
      ADVERTISEMENTS) (EXEMPTIONS) ORDER 1996 OR IS A PERSON TO WHOM SUCH DOCUMENT
      MAY
      OTHERWISE LAWFULLY BE ISSUED OR PASSED ON.</div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTICE
      TO NEW HAMPSHIRE RESIDENTS</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">NEITHER
      THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS
      BEEN
      FILED UNDER RSA 421-B WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT
      A&#160;SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE
      OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE
      OF
      NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND
      NOT
      MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION
      IS
      AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE
      OF
      THE STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITS OR
      QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY
      OR&#160;TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY
      PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH
      THE PROVISIONS OF THIS PARAGRAPH.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">ii</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong><a name="2"></a>FORWARD-LOOKING
  STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">This
      prospectus and the information incorporated herein by reference contain
&#8220;forward-looking statements&#8221; within the meaning of Section 21E of the Securities
      Exchange Act of 1934, as amended, or the Exchange Act; Section 27A of the
      Securities Act; and pursuant to the Private Securities Litigation Reform Act.
      These forward-looking statements are not historical facts, but rather our
      beliefs and expectations based on our current expectations, estimates,
      projections, beliefs and assumptions about our company and industry. Words
      such
      as &#8220;anticipates,&#8221; &#8220;expects,&#8221; &#8220;intends,&#8221; &#8220;plans,&#8221; &#8220;believes,&#8221; &#8220;seeks,&#8221;
&#8220;estimates&#8221; and similar expressions are intended to identify forward-looking
      statements. There statements are not guarantees of future performance and are
      subject to risks, uncertainties and other factors, some of which are beyond
      our
      control, are difficult to predict and could cause actual results to differ
      materially from those expressed or forecasted in the forward-looking statements.
      These risks include those set forth in the section of this prospectus called
      &#8220;Risk Factors.&#8221;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Those
      risks are representative of factors that could affect the outcome of the
      forward-looking statements. These and the other factors discussed elsewhere
      in
      this prospectus and the documents incorporated by reference herein are not
      necessarily all of the important factors that cause our results to differ
      materially from those expressed in our forward-looking statements. We caution
      you not to place undue reliance on these forward-looking statements, which
      reflect our view only as of the respective dates of this prospectus and the
      documents incorporated herein by reference or other dates that are specified
      in
      those documents.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">iii</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong><a name="3"></a>SUMMARY</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>This
      summary highlights information contained in the documents incorporated herein
      by
      reference. This summary does not contain all of the information that you should
      consider before deciding to make an investment decision. You should read this
      entire prospectus carefully, including the &#8220;Risk Factors&#8221; section in this
      prospectus; the financial statements and related notes contained in our Annual
      Report on Form 10-K and Form 10-K/A for the fiscal year ended December&#160;31,
      2006, filed with the SEC on March&#160;6, 2007 and March&#160;16, 2007,
      respectively; our Quarterly Report on Form 10-Q for the quarter ended
      March&#160;31, 2007 filed with the SEC on May&#160;10, 2007; and the documents
      incorporated herein by reference . As used in this prospectus, &#8220;we,&#8221; &#8220;our,&#8221;
&#8220;ours,&#8221; &#8220;us,&#8221; &#8220;company&#8221; and &#8220;AREP&#8221; mean American Real Estate Partners, L.P. and,
      unless the context otherwise indicates, include our consolidated
      subsidiaries.</i></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>Our
      Company</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">American
      Real Estate Partners, L.P., or AREP, is a master limited partnership formed
      in
      Delaware on February&#160;17, 1987. We are a diversified holding company owning
      subsidiaries engaged in the following operating businesses: &#160;gaming, real
      estate and home fashion. On April&#160;22, 2007, American Entertainment
      Properties Corp., or AEP, a wholly owned indirect subsidiary of AREP, entered
      into a Membership Interest Purchase Agreement with W2007/ACEP Holdings, LLC,
      an
      affiliate of Whitehall Street Real Estate Funds, a series of real estate
      investment funds affiliated with Goldman, Sachs &amp; Co., or Whitehall Street
      Real Estate Funds, to sell all of the issued and outstanding membership
      interests of American Casino &amp; Entertainment Properties, LLC, or ACEP, which
      comprises our gaming operations. The parties expect to close the transaction
      in
      approximately December 2007. On February&#160;9, 2007, we entered into an
      agreement and plan of merger, pursuant to which we would acquire Lear
      Corporation, or Lear, a publicly traded company that provides automotive
      interior systems worldwide, for an aggregate consideration of approximately
      $5.2&#160;billion, including the assumption by the surviving entity of certain
      outstanding indebtedness of Lear and refinancing of Lear&#8217;s existing term loan
      and credit facility. The consummation of the transaction is subject to
      regulatory approvals and shareholder vote.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      primary business strategy is to continually evaluate our existing operating
      businesses with a view to maximizing value to our unitholders. We may also
      seek
      to acquire additional businesses that are distressed or in out-of-favor
      industries and will consider the divestiture of businesses. In addition, we
      invest our available liquidity in debt and equity securities with a view to
      enhancing returns as we continue to assess further acquisitions of operating
      businesses.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      general partner is American Property Investors, Inc., the general partner,
      or
      API, a Delaware corporation, which is indirectly wholly owned by Carl C. Icahn.
      We own our businesses and conduct our investment activities through a subsidiary
      limited partnership, American Real Estate Holdings Limited Partnership, or
      AREH,
      in which we own a 99% limited partnership interest, and its subsidiaries. API
      also acts as the general partner for AREH. API has a 1% general partnership
      interest in each of us and AREH. As of March&#160;31, 2007, affiliates of
      Mr.&#160;Icahn beneficially owned 55,655,382 units representing AREP limited
      partner interests, or the depositary units, representing approximately 90.0%
      of
      the outstanding depositary units, and 10,304,013 cumulative pay-in-kind
      redeemable preferred units, representing AREP limited partner interests, or
      the
      preferred units, representing approximately 86.5% of the outstanding preferred
      units.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      depositary units, representing limited partnership interests, trade on the
      New
      York Stock Exchange under the symbol &#8220;ACP.&#8221;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      principal executive offices are located at 767 Fifth Avenue, Suite 4700, New
      York, New York 10153. Our phone number is (212) 702-4300. Our web site address
      is <i>http://www.AREP.com</i>.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">American
      Real Estate Finance Corp., or AREP Finance, a Delaware corporation, is our
      wholly owned subsidiary. AREP Finance was incorporated on April&#160;19, 2004
      and was formed solely for the purpose of serving as co-issuer of debt securities
      of AREP. AREP Finance does not and will not have any operations or assets and
      does not and will not have any revenues. AREP Finance&#8217;s principal business
      address is 767 Fifth Avenue, Suite 4700, New York, New York 10153 and its
      telephone number is (212) 702-4300. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">1</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>Summary
      of the Exchange Offer</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="149">
            </td>
            <td width="12">
            </td>
            <td width="305">
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">The
                Offering of the Private Notes</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">On
                January&#160;17, 2007, we issued $500&#160;million in aggregate principal
                amount of our private notes in an offering not registered under the
                Securities Act. At the time we issued the private notes on
                January&#160;17, 2007, we entered into a registration rights agreement in
                which we agreed to offer to exchange the private notes for new notes
                which
                have been registered under the Securities Act. This exchange offer
                is
                intended to satisfy that obligation. The private notes issued
                January&#160;17, 2007 were additional notes issued under an indenture
                dated February&#160;7, 2005 as described elsewhere in this prospectus. On
                February&#160;1, 2005, we issued and sold $480.0&#160;million of 7 1/8%
                senior notes due 2013, or the existing notes.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">The
                Exchange Offer</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">We
                are
                offering to exchange the new notes which have been registered under
                the
                Securities Act for the private notes. As of this date, there is
                $500&#160;million aggregate principal amount of private notes
                outstanding.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Required
                Representations</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt">In
                order to participate in this exchange offer, you will be required
                to make
                certain representations to us in a letter of transmittal, including
                that:</div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">any
                new notes will be acquired by you
                in the ordinary course of your business;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">you
                have not engaged in, do not
                intend to engage in, and do not have an arrangement or understanding
                with
                any person to participate in a distribution of the new notes;
                and</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">you
                are not an affiliate of our
                company.</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Resale
                of New Notes</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt">We
                believe that, subject to limited exceptions, the new notes may be
                freely
                traded by you without compliance with the registration and prospectus
                delivery provisions of the Securities Act, provided that:</div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">you
                are acquiring new notes in the
                ordinary course of your business;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">you
                are not participating, do not
                intend to participate and have no arrangement or understanding with
                any
                person to participate in the distribution of the new notes;
                and</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">you
                are not an affiliate of our
                company.</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">If
                our
                belief is inaccurate and you transfer any new note issued to you
                in the
                exchange offer without delivering a prospectus meeting the requirements
                of
                the Securities Act or without an exemption from registration of your
                new
                notes from such requirements, you may incur liability under the Securities
                Act. We do not assume, or indemnify you against, such
                liability.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">Each
                broker-dealer that is issued new notes for its own account in exchange
                for
                private notes which were acquired by such broker-dealer as a result
                of
                market-making or other trading activities also must acknowledge that
                it
                has not entered into any arrangement or understanding with us or
                any of
                our affiliates to distribute the new notes and will deliver a prospectus
                meeting the requirements of the Securities Act in connection with
                any
                resale of the new notes issued in the exchange offer.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">We
                have agreed in the registration rights agreement that a broker-dealer
                may
                use this prospectus for an offer to resell, resale or other retransfer
                of
                the new notes issued to it in the exchange offer.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Expiration
                Date</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">The
                exchange offer will expire at 5:00 p.m., New York City time, on
                &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
                2007, unless extended, in which case the term &#8220;expiration date&#8221; shall mean
                the latest date and time to which we extend the exchange
                offer.</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">2</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="FONT-SIZE: 8pt; PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
&#160;</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="149">
            </td>
            <td width="12">
            </td>
            <td width="305">
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Conditions
                to the Exchange Offer</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">The
                exchange offer is subject to certain customary conditions, which
                may be
                waived by us. The exchange offer is not conditioned upon any minimum
                principal amount of private notes being tendered.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Procedures
                for Tendering Private Notes</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 3.35pt">If you wish to
                tender
                your private notes for exchange, you must transmit to Wilmington
                Trust
                Company, as exchange agent, at the address set forth in this prospectus
                under the heading &#8220;The Exchange Offer &#8212; Exchange Agent,&#8221; and on the front
                cover of the letter of transmittal, on or before the expiration date,
                a
                properly completed and duly executed letter of transmittal, which
                accompanies this prospectus, or a facsimile of the letter of transmittal
                and either:</div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 3.35pt"><font style="FONT-FAMILY: Times New Roman">the
                private notes and any other
                required documentation, to the exchange agent; or</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">a
                computer generated message
                transmitted by means of DTC&#8217;s Automated Tender Offer Program system and
                received by the exchange agent and forming a part of a confirmation
                of
                book entry transfer in which you acknowledge and agree to be bound
                by the
                terms of the letter of transmittal.</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">If
                either of these procedures cannot be satisfied on a timely basis,
                then you
                should comply with the guaranteed delivery procedures described below.
                By
                executing the letter of transmittal, each holder of private notes
                will
                make certain representations to us described under &#8220;The Exchange Offer &#8212;
                Procedures for Tendering.&#8221;</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Special
                Procedures for Beneficial Owners</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">If
                you
                are a beneficial owner whose private notes are registered in the
                name of a
                broker, dealer, commercial bank, trust company or other nominee and
                you
                wish to tender your private notes in the exchange offer, you should
                contact such registered holder promptly and instruct such registered
                holder to tender on your behalf. If you wish to tender on your own
                behalf,
                you must, prior to completing and executing the letter of transmittal
                and
                delivering your private notes, either make appropriate arrangements
                to
                register ownership of the private notes in your name or obtain a
                properly
                completed bond power from the registered holder. The transfer of
                registered ownership may take considerable time and may not be able
                to be
                completed prior to the expiration date.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Guaranteed
                Delivery Procedures</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">If
                you
                wish to tender private notes and time will not permit the documents
                required by the letter of transmittal to reach the exchange agent
                prior to
                the expiration date, or the procedure for book-entry transfer cannot
                be
                completed on a timely basis, you must tender your private notes according
                to the guaranteed delivery procedures described under &#8220;The Exchange Offer
                &#8212; Guaranteed Delivery Procedures.&#8221;</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Acceptance
                of Private Notes and Delivery of New Notes</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">Subject
                to
                the conditions described under &#8220;The Exchange Offer &#8212; Conditions,&#8221; we will
                accept for exchange any and all private notes which are validly tendered
                in the exchange offer and not withdrawn, prior to 5:00&#160;p.m., New York
                City time, on the expiration date.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Withdrawal
                Rights</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">You
                may withdraw your tender of private notes at any time prior to
                5:00&#160;p.m., New York City time, on the expiration date, subject to
                compliance with the procedures for withdrawal described in this prospectus
                under the heading &#8220;The Exchange Offer &#8212; Withdrawal of
                Tenders.&#8221;</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Federal
                Income Tax Consequences</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">For
                a
                discussion of the material federal income tax considerations relating
                to
                the exchange of private notes for the new notes as well as the ownership
                of the new notes, see &#8220;Certain U.S. Federal Income Tax
                Consequences.&#8221;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">3</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="FONT-SIZE: 10pt; PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
&#160;</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="149">
            </td>
            <td width="12">
            </td>
            <td width="305">
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Exchange
                Agent</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">The
                Wilmington Trust Company is serving as the exchange agent. The address,
                telephone number and facsimile number of the exchange agent are set
                forth
                in this prospectus under the heading &#8220;The Exchange Offer &#8212; Exchange
                Agent.&#8221;</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="199">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Consequences
                of Failure to Exchange Private Notes</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="407">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">If
                you
                do not exchange private notes for new notes, you will continue to
                be
                subject to the restrictions on transfer provided in the private notes
                and
                in the indenture governing the private notes. In general, the unregistered
                private notes may not be offered or sold, unless they are registered
                under
                the Securities Act, except pursuant to an exemption from, or in a
                transaction not subject to, the Securities Act and applicable state
                securities laws.</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">4</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>The
      New
      Notes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The terms
      of the new notes we are issuing in this exchange offer and the private notes
      that are outstanding are identical in all material respects except:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">The
      new notes will be registered under the
      Securities Act;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">The
      new notes will not contain transfer
      restrictions and registration rights that relate to the private
      notes.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The new
      notes will evidence the same debt as the private notes and will be governed
      by
      the same indenture. References to the notes include both private notes and
      new
      notes.</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="135">
            </td>
            <td width="12">
            </td>
            <td width="320">
            </td>
          </tr>
          <tr>
            <td valign="top" width="180">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="427">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="180">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Issuer</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">AREP
                is a holding company. Its operations are conducted through its
                subsidiaries and substantially all of its assets consist of a 99%
                limited
                partnership interest in its subsidiary, AREH, which is a holding
                company
                for its&#160; operating subsidiaries and investments. The new notes will
                be guaranteed by AREH.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="180">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Co-Issuer</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">AREP
                Finance is a wholly owned subsidiary of AREP. It was formed solely
                for the
                purpose of serving as a co-issuer of debt securities of AREP in order
                to
                facilitate offerings of the debt securities. Other than as a co-issuer
                of
                the notes, AREP Finance does not and will not have any operations
                or
                assets and will not have any revenues. As a result, holders of the
                notes
                should not expect AREP Finance to participate in servicing any obligations
                on the new notes.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="180">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Notes
                Offered</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">$500&#160;million
                in aggregate principal amount of 7 1/8% senior notes due 2013.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="180">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Maturity</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">February&#160;15,
                2013.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="180">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Interest
                Payment Dates</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">February&#160;15
                and August&#160;15 of each year, commencing February&#160;15,
                2007.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="180">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Guarantee</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">If
                we
                cannot make payments on the new notes when they are due, AREH must
                make
                them instead. Other than AREH, none of our subsidiaries will guarantee
                payments on the new notes.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="180">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Ranking</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">The
                new notes and the guarantee will rank equally with all of our and
                the
                guarantor&#8217;s existing and future senior unsecured indebtedness, including
                our existing notes, and will rank senior to all of our and the guarantor&#8217;s
                existing and future subordinated indebtedness. The new notes and
                the
                guarantee will be effectively subordinated to all of our and the
                guarantor&#8217;s existing and future secured indebtedness, to the extent of the
                collateral securing such indebtedness. The new notes and the guarantee
                also will be effectively subordinated to all indebtedness and other
                liabilities, including trade payables, of all our subsidiaries other
                than
                AREH. As of March&#160;31, 2007, the new notes and the guarantee would
                have been effectively subordinated to an aggregate of $375.5&#160;million
                of AREH&#8217;s secured debt and our subsidiaries&#8217; debt, excluding trade
                payables.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="180">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Optional
                Redemption</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">We
                may, at our option, redeem some or all of the new notes at any time
                on or
                after February&#160;15, 2009, at the redemption prices listed under
                &#8220;Description of Notes &#8212; Optional Redemption.&#8221;</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="180">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">In
                addition, prior to February&#160;15, 2008, we may, at our option, redeem
                up to 35% of the new notes with the proceeds of certain sales of
                our
                equity at the redemption price listed under &#8220;Description of Notes &#8212;
                Optional Redemption.&#8221; We may make the redemption only if, after the
                redemption, at least 65% of the aggregate principal amount of the
                notes
                issued remains outstanding.</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">5</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="FONT-SIZE: 10pt; PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
&#160;</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="134">
            </td>
            <td width="12">
            </td>
            <td width="320">
            </td>
          </tr>
          <tr>
            <td valign="top" width="179">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Redemption
                Based on Gaming&#160;Laws</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">The
                new notes are subject to mandatory disposition and redemption requirements
                following certain determinations by applicable gaming authorities.
                On
                April&#160;22, 2007, AEP entered into a Membership Interest Purchase
                Agreement with W2007/ACEP Holdings, LLC, an affiliate of Whitehall
                Street
                Real Estate Funds, to sell all of the issued and outstanding membership
                interests of ACEP which comprises our gaming operations. If the sale
                is
                consummated, the new notes will no longer be subject to redemption
                based
                on gaming laws.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="179">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Certain
                Covenants</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt">We
                will issue the new notes under the indenture with AREH and Wilmington
                Trust Company, as trustee acting on your behalf, dated February&#160;7,
                2005, which was established in connection with our existing notes.
                The
                indenture, among other things, restricts our and AREH&#8217;s ability to:</div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">incur
                additional debt;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">pay
                dividends and make
                distributions;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">repurchase
                equity
                securities;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">create
                liens;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 3.35pt; LINE-HEIGHT: 11pt"><font style="FONT-FAMILY: Times New Roman">enter
                into transactions with
                affiliates; and</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 5pt"><font style="FONT-FAMILY: Times New Roman">merge
                or
                consolidate.</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="179">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">Our
                subsidiaries other than AREH will not be restricted in their ability
                to
                incur debt, create liens or merge or consolidate.</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="179">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Absence
                of Established Market for Notes</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="427">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt; LINE-HEIGHT: 11pt">The
                new notes will be new securities for which there is currently no
                market.
                We cannot assure you that a liquid market for the new notes will
                develop
                or be maintained.</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">6</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong><a name="4"></a>RISK
  FACTORS</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>You
      should consider carefully each of the following risks and all other information
      contained in this prospectus before deciding to invest in the notes.</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt" align="center"><strong>Risks
      Relating to the Exchange Offer</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Holders who fail
      to
      exchange their private notes will continue to be subject to restrictions on
      transfer.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If you
      do
      not exchange your private notes for new notes in the exchange offer, you will
      continue to be subject to the restrictions on transfer of your private notes
      described in the legend on your private notes. The restrictions on transfer
      of
      your private notes arise because we issued the private notes under exemptions
      from, or in transactions not subject to, the registration requirements of the
      Securities Act and applicable state securities laws. In general, you may only
      offer or sell the private notes if they are registered under the Securities
      Act
      and applicable state securities laws, or are offered and sold under an exemption
      from these requirements. We do not plan to register the private notes under
      the
      Securities Act.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Broker-dealers
      or
      holders of notes may become subject to the registration and prospectus delivery
      requirements of the Securities Act.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Any
      broker-dealer that:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">exchanges
      its private notes in the exchange
      offer for the purpose of participating in a distribution of the new notes
      or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">resells
      new notes that were received by it
      for its own account in the exchange offer</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">may be deemed to have
      received restricted securities and may be required to comply with the
      registration and prospectus delivery requirements of the Securities Act in
      connection with any resale transaction by that broker-dealer. Any profit on
      the
      resale of the new notes and any commission or concessions received by a
      broker-dealer may be deemed to be underwriting compensation under the Securities
      Act. In addition to broker-dealers, any holder of notes that exchanges its
      private notes in the exchange offer for the purpose of participating in a
      distribution of the new notes may be deemed to have received restricted
      securities and may be required to comply with the registration and prospectus
      delivery requirements of the Securities Act in connection with any resale
      transaction by that holder.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We cannot guarantee
      that there will be a trading market for the new notes.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The new
      notes are a new issue of securities and currently there is no market for them.
      We do not intend to apply to have the new notes listed or quoted on any exchange
      or quotation system. Accordingly, we cannot assure you that a liquid market
      will
      develop for the new notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      liquidity of any market for the new notes will depend on a variety of factors,
      including:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      number of holders of the new
      notes;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">our
      performance; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      market for similar securities and the
      interest of securities dealers in making a market in the new notes.</font></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>A liquid trading
      market may not develop for the new notes.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Historically,
      the market for non-investment grade debt has been subject to disruptions that
      have caused substantial volatility in the prices of securities similar to the
      new notes. The market, if any, for the new notes may experience similar
      disruptions that may adversely affect the prices at which you may sell your
      new
      notes. If an active trading market does not develop or is not maintained, the
      market price and liquidity of the new notes may be adversely affected.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">To the
      extent private notes are tendered and accepted in the exchange offer, the
      trading market, if any, for the private notes that are not so tendered would
      be
      adversely affected.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">7</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always" align="center">
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<strong>Risks
      Relating to Our Structure and
      Indebtedness</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Our general partner
      and its control person could exercise their influence over us to your
      detriment.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Mr.&#160;Icahn,
      through affiliates, currently owns 100% of API, our general partner, and
      approximately 86.5% of our outstanding preferred units and approximately 90%
      of
      our depositary units and, as a result, has the ability to influence many aspects
      of our operations and affairs. API also is the general partner of AREH.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      interests of Mr.&#160;Icahn, including his interests in entities in which he and
      we have invested or may invest in the future, may differ from your interests
      as
      a noteholder and, as such, he may take actions that may not be in your interest.
      For example, if we encounter financial difficulties or are unable to pay our
      debts as they mature, Mr.&#160;Icahn&#8217;s interests might conflict with your
      interests as a noteholder.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">In
      addition, if Mr.&#160;Icahn were to sell, or otherwise transfer, some or all of
      his interests in us to an unrelated party or group, a change of control could
      be
      deemed to have occurred under the terms of the indenture governing the notes
      which would require us to offer to repurchase all outstanding notes at 101%
      of
      their principal amount plus accrued and unpaid interest and liquidated damages,
      if any, to the date of repurchase. However, it is possible that we will not
      have
      sufficient funds at the time of the change of control to make the required
      repurchase of notes.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We have engaged,
      and in the future may engage, in transactions with our
      affiliates.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      invested and may in the future invest in entities in which Mr.&#160;Icahn also
      invests. We also have purchased and may in the future purchase entities or
      investments from him or his affiliates. Although API has never received fees
      in
      connection with our investments, our partnership agreement allows for the
      payment of these fees. Mr.&#160;Icahn may pursue other business opportunities in
      industries in which we compete and there is no requirement that any additional
      business opportunities be presented to us.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      entered into an agreement and plan of merger pursuant to which we would acquire
      all of the issued and outstanding common stock of Lear for an aggregate
      consideration of approximately $5.2&#160;billion, including the assumption by the
      surviving entity of certain outstanding indebtedness of Lear and the refinancing
      of Lear&#8217;s existing term loan and credit facility. Mr.&#160;Icahn beneficially
      owns approximately 16.0% of Lear&#8217;s outstanding common stock. The consummation of
      the transaction is subject to regulatory approvals and shareholder vote.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Mr. Icahn
previously proposed that we acquire his interest in American Railcar, Inc., or American Railcar, and Philip
Services Corporation, or Philip Services. American Railcar is a publicly traded company that is primarily engaged in the
business of manufacturing covered hoppers and tank railcars. Philip Services is an industrial services company that
provides industrial outsourcing, environmental services and metal services to major industry sectors throughout North
America. A committee of independent directors of the board was formed to consider those proposals. Currently, at Mr.
Icahn&#8217;s request, only the proposal regarding the potential acquisition of the metal services business of Philip Services
is being considered by the committee. Any acquisition would be subject to, among other things, the negotiation, execution
and closing of a definitive agreement and the receipt of a fairness opinion. We continuously identify, evaluate and
engage in discussions concerning potential investments and acquisitions, including potential investments in and
acquisitions of affiliates of Mr. Icahn. There cannot be any assurance that any potential transactions that we consider
will be completed.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Certain of our
      management are committed to the management of other
      businesses.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Certain
      of the individuals who conduct the affairs of API, including the chairman of
      our
      board of directors, Mr.&#160;Icahn, our principal executive officer, Keith A.
      Meister, and our president, Peter K. Shea, are, and will be, committed to the
      management of other businesses owned or controlled by Mr.&#160;Icahn and his
      affiliates. Accordingly, these individuals may focus significant amounts of
      time
      and attention on managing these other businesses. Conflicts may arise in the
      future between our interests and other entities or business activities in which
      such individuals are involved. Conflicts of interest may arise as we may compete
      with such affiliates for the same assets, purchasers and sellers of assets
      or
      financings.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We and AREH are
      holding companies and will depend on the businesses of our subsidiaries to
      satisfy our obligations under the notes.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We and
      AREH are holding companies. In addition to cash and cash equivalents, U.S.
      government and agency obligations, marketable equity and debt securities and
      other short-term investments, our assets consist primarily of investments in
      our
      subsidiaries. Moreover, if we make significant investments in operating
      businesses, it is likely </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">8</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
that
      we will reduce the liquid assets at AREP and AREH in order to fund those
      investments and the ongoing operations of our subsidiaries. Consequently, our
      cash flow and our ability to meet our debt service obligations likely will
      depend on the cash flow of our subsidiaries and the payment of funds to us
      by
      our subsidiaries in the form of dividends, distributions, loans or
      otherwise.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      operating results of our subsidiaries may not be sufficient to make
      distributions to us. In addition, our subsidiaries are not obligated to make
      funds available to us for payment on the notes or otherwise, and distributions
      and intercompany transfers from our subsidiaries to us may be restricted by
      applicable law or covenants contained in debt agreements and other agreements
      to
      which these subsidiaries may be subject or enter into in the future. The terms
      of any borrowings of our subsidiaries or other entities in which we own equity
      may restrict dividends, distributions or loans to us. For example, the notes
      issued by our indirect wholly owned subsidiary, ACEP, contain restrictions
      on
      dividends and distributions and loans to us, as well as on other transactions
      with us. ACEP also has a credit agreement which contains financial covenants
      that have the effect of restricting dividends or distributions. This agreement
      precludes our receiving payments from the operations of our gaming properties
      which account for a significant portion of our revenues and cash flows. We
      have
      credit facilities for WestPoint International, Inc., or WPI, our majority owned
      subsidiary, and our real estate development properties that also restrict
      dividends, distributions and other transactions with us. To the degree any
      distributions and transfers are impaired or prohibited, our ability to make
      payments on the notes and other debt will be limited.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We, AREH or our
      subsidiaries may be able to incur substantially more debt.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We, AREH
      or our subsidiaries may be able to incur substantial additional indebtedness
      in
      the future. The terms of the indenture governing the notes described herein,
      as
      well as the indentures governing our 8.125% senior notes due 2012 and our
      Variable Rate Senior Convertible Notes due 2013, do not prohibit us or our
      subsidiaries from doing so. We and AREH may incur additional indebtedness if
      we
      comply with certain financial tests contained in the indentures that govern
      these notes, including the indenture governing the notes described herein.
      As of
      March&#160;31, 2007, based upon these tests, we and AREH could have incurred up
      to approximately $1.4&#160;billion of additional indebtedness. If we complete
      the acquisition of Lear, and fund the acquisition with borrowings, as we
      currently contemplate, under the financial tests contained in the indentures
      (including the indenture governing the notes described herein), AREP and AREH
      will not be able to incur additional indebtedness. However, our subsidiaries,
      other than AREH are not subject to any of the covenants contained in the
      indentures (including the indenture governing the notes described herein),
      including the covenant restricting debt incurrence. If new debt is added to
      our,
      AREH&#8217;s and our subsidiaries&#8217; current debt levels, the related risks that we,
      AREH and they now face could intensify.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>The notes will
      be
      effectively subordinated to any secured indebtedness, and all the indebtedness
      and liabilities of our subsidiaries other than AREH.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The notes
      will be effectively subordinated to our and AREH&#8217;s existing and future secured
      indebtedness to the extent of the collateral securing such indebtedness. We
      and
      AREH may be able to incur substantial additional secured indebtedness in the
      future. The terms of the indenture permit us and AREH to do so. The notes will
      also be effectively subordinated to all the indebtedness and liabilities,
      including trade payables, of all of our subsidiaries, other than AREH. In the
      event of a bankruptcy, liquidation or reorganization of any of our subsidiaries,
      other than AREH, holders of their indebtedness and their trade creditors will
      generally be entitled to payment of their claims from the assets of those
      subsidiaries before any assets are made available for distribution to us.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Our subsidiaries,
      other than AREH, will not be subject to any of the covenants in the indenture
      for the notes and only AREH will guarantee the notes. We may not be able to
      rely
      on the cash flow or assets of our subsidiaries to pay our
      indebtedness.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      subsidiaries, other than AREH, will not be subject to the covenants under the
      indenture for the notes. We may form additional subsidiaries in the future
      which
      will not be subject to the covenants under the indenture for the notes. Of
      our
      existing and future subsidiaries, only AREH is required to guarantee the notes.
      Our existing and future non-guarantor subsidiaries may enter into financing
      arrangements that limit their ability to make dividends, distributions, loans
      or
      other payments to fund payments in respect of the notes. Accordingly, we may
      not
      be able to rely on the cash flow or assets of our subsidiaries to pay the
      notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">9</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always" align="center">
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<strong>Risks
      Relating to the Notes</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Our failure to
      comply with the covenants contained under any of our debt instruments, including
      the indenture governing the notes (including our failure as a result of events
      beyond our control), could result in an event of default which would materially
      and adversely affect our financial condition.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If there
      were an event of default under one of our debt instruments, the holders of
      the
      defaulted debt could cause all amounts outstanding with respect to that debt
      to
      be due and payable immediately. In addition, any event of default or declaration
      of acceleration under one debt instrument could result in an event of default
      under one or more of our other debt instruments, including the notes. It is
      possible that, if the defaulted debt is accelerated, our assets and cash flow
      may not be sufficient to fully repay borrowings under our outstanding debt
      instruments and we cannot assure you that we would be able to refinance or
      restructure the payments on those debt securities.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>To service our
      indebtedness, we will require a significant amount of cash. Our ability to
      maintain our current cash position or generate cash depends on many factors
      beyond our control.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      ability to make payments on and to refinance our indebtedness, including the
      notes, and to fund operations will depend on existing cash balances and our
      ability to generate cash in the future. This, to a certain extent, is subject
      to
      general economic, financial, competitive, regulatory and other factors that
      are
      beyond our control.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      current businesses and businesses that we acquire may not generate sufficient
      cash to service our debt, including the notes. In addition, we may not generate
      sufficient cash flow from operations or investments and future borrowings may
      not be available to us in an amount sufficient to enable us to service our
      indebtedness, including the notes, or to fund our other liquidity needs. We
      may
      need to refinance all or a portion of our indebtedness, including the notes,
      on
      or before maturity. We cannot assure you that we will be able to refinance
      any
      of our indebtedness, including the notes, on commercially reasonable terms
      or at
      all.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>The indenture
      does
      not restrict our ability to change our lines of business or invest the proceeds
      of asset sales and allows for the sale of all or substantially all of our and
      AREH&#8217;s assets without the notes being assumed by the
      acquirers.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      indenture does not restrict in any way the businesses in which we may engage
      and
      if we were to change our current lines of business, in whole or in part, you
      would not be entitled to accelerated repayment of the notes. We also are not
      required to offer to purchase notes with the proceeds from asset sales,
      including in the event of the sale of all or substantially all of our assets
      or
      AREH&#8217;s assets, and we may reinvest the proceeds without the approval of
      noteholders. In addition, we and AREH may sell all or substantially all of
      our
      and its assets without the notes being assumed by the acquirers.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We may not have
      sufficient funds necessary to finance the change of control offer required
      by
      the indenture.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Upon
      the
      occurrence of certain specific kinds of change of control events, we will be
      required to offer to repurchase all outstanding notes at 101% of their principal
      amount plus accrued and unpaid interest and liquidated damages, if any, to
      the
      date of repurchase. Mr.&#160;Icahn, through affiliates, currently owns 100% of
      API and approximately 90.0% of our outstanding depositary units and 86.5% of
      our
      outstanding preferred units. If he were to sell or otherwise transfer some
      or
      all of his interests in us to unrelated parties, a change of control could
      be
      deemed to have occurred under the terms of the indenture governing the notes.
      However, it is possible that we will not have sufficient funds at the time
      of
      the change of control to make the required repurchase of notes.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Federal and state
      statutes allow courts, under specific circumstances, to void guarantees and
      require noteholders to return payments received from the
      guarantor.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Under
      the
      federal bankruptcy law and comparable provisions of state fraudulent transfer
      laws, a guarantee could be voided, or claims in respect of a guarantee could
      be
      subordinated to all other debts of that guarantor if, among other things, the
      guarantor, at the time it incurred the indebtedness evidenced by its
      guarantee:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">received
      less than reasonably equivalent
      value or fair consideration for the incurrence of such guarantee;
      and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">was
      insolvent or rendered insolvent by
      reason of such incurrence; or</font></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">10</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: -10pt; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 10pt">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
</div>
    <div style="PADDING-LEFT: 36pt; FONT-SIZE: 8pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">was
      engaged in a business or transaction
      for which the guarantor&#8217;s remaining assets constituted unreasonably small
      capital; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">intended
      to incur, or believed that it
      would incur, debts beyond its ability to pay such debts as they
      mature.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition, any payment by that guarantor pursuant to its guarantee could be
      voided and required to be returned to the guarantor, or to a fund for the
      benefit of the creditors of the guarantor.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      measures of insolvency for purposes of these fraudulent transfer laws will
      vary
      depending upon the law applied in any proceeding to determine whether a
      fraudulent transfer has occurred. Generally, however, a guarantor would be
      considered insolvent if:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      sum of its debts, including contingent
      liabilities, was greater than the fair saleable value of all of its assets;
      or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt; FONT-FAMILY: Times New (W1)"><font style="FONT-FAMILY: Times New (W1)">the
      present fair saleable value of its
      assets was less than the amount that would be required to pay its probable
      liability on its existing debts, including contingent liabilities, as they
      become absolute and mature; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">it
      could not pay its debts as they become
      due.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On the
      basis of historical financial information, recent operating history and other
      factors, we believe that AREH, after giving effect to its guarantee of these
      notes, will not be insolvent, will not have unreasonably small capital for
      the
      businesses in which it is engaged and will not have incurred debts beyond its
      ability to pay such debts as they mature. We cannot assure you, however, as
      to
      what standard a court would apply in making these determinations or that a
      court
      would agree with our conclusions in this regard.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>As a noteholder
      you
      may be required to comply with licensing, qualification or other requirements
      under gaming laws and could be required to dispose of the
      notes.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Currently,
      ACEP&#8217;s casino assets are comprised of the Stratosphere Casino Hotel &amp; Tower,
      the Arizona Charlie&#8217;s Decatur, the Arizona Charlie&#8217;s Boulder and the Aquarius
      Casino Resort. We may be required to disclose the identities of the holders
      of
      the notes to the Nevada gaming authorities upon request. The Nevada Gaming
      Commission may, in its discretion, require a holder of the notes to file an
      application, be investigated and be found suitable to hold the notes. In
      addition, the Nevada Gaming Commission may, in its discretion, require the
      holder of any debt security of a company registered by the Nevada Gaming
      Commission as a publicly-traded corporation to file an application, be
      investigated and be found suitable to own such debt security.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">If
      a record or beneficial holder of a note is required by the Nevada Gaming
      Commission to be found suitable, such owner will be required to apply for a
      finding of suitability within 30 days after request of such gaming authority
      or
      within such earlier time prescribed by such gaming authority. The applicant
      for
      a finding of suitability must pay all costs of the application and investigation
      for such finding of suitability. If the Nevada Gaming Commission determines
      that
      a person is unsuitable to own such security, then, pursuant to the Nevada Gaming
      Control Act, we can be sanctioned, including the loss of our approvals, if,
      without the prior approval of the Nevada Gaming Commission, we:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">pay
      to the unsuitable person any dividend,
      interest, or any distribution whatsoever;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">recognize
      any voting right of the
      unsuitable person with respect to such securities;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">pay
      the unsuitable person remuneration in
      any form; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">make
      any payment to the unsuitable person
      by way of principal, redemption, conversion, exchange, liquidation or similar
      transaction.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Each
      holder of the notes will be deemed to have agreed, to the extent permitted
      by
      law, that if the Nevada gaming authorities determine that a holder or beneficial
      owner of the notes must be found suitable, and if that holder or beneficial
      owner either refuses to file an application or is found unsuitable, that holder
      shall, upon our request, dispose of its notes within 30 days after receipt
      of
      our request, or earlier as may be ordered by the Nevada gaming authorities.
      We
      will also have the right to call for the redemption of notes of any holder
      at
      any time to prevent the loss or material impairment of a gaming license or
      an
      application for a gaming license at a redemption price equal to:</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">11</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: -10pt; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 10pt">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
</div>
    <div style="PADDING-LEFT: 36pt; FONT-SIZE: 8pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>

    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt; FONT-FAMILY: Times New (W1)"><font style="FONT-FAMILY: Times New (W1)">the
      lesser of the cost paid by the holder or
      the fair market value of the notes, in each case, plus accrued and unpaid
      interest and liquidated damages, if any, to the earlier of the date of
      redemption, or earlier as may be required by the Nevada gaming authorities
      or
      the finding of unsuitability by the Nevada gaming authorities; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">such
      other lesser amount as may be ordered
      by the Nevada gaming authorities.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We will
      notify the trustee under the indenture in writing of any redemption as soon
      as
      practicable. We will not be responsible for any costs or expenses you may incur
      in connection with your application for a license, qualification or a finding
      of
      suitability, or your compliance with any other requirement of a gaming
      authority. The indenture also provides that as soon as a gaming authority
      requires you to sell your notes, you will, to the extent required by applicable
      gaming laws, have no further right:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">to
      exercise, directly or indirectly, any
      right conferred by the notes or the indenture; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">to
      receive from us any interest, dividends
      or any other distributions or payments, or any remuneration in any form,
      relating to the notes, except the redemption price we refer to
      above.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      April&#160;22, 2007, AEP entered into a Membership Interest Purchase Agreement
      with W2007/ACEP Holdings, LLC, an affiliate of Whitehall Street Real Estate
      Funds, to sell all of the issued and outstanding membership interests of ACEP
      which comprises our gaming operations.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Since we are
      a
      limited partnership, you may not be able to pursue legal claims against us
      in
      U.S. federal courts.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We are
      a
      limited partnership organized under the laws of the state of Delaware. Under
      the
      rules of federal civil procedure, you may not be able to sue us in federal
      court
      on claims other than those based solely on federal law, because of lack of
      complete diversity. Case law applying diversity jurisdiction deems us to have
      the citizenship of each of our limited partners. Because we are a publicly
      traded limited partnership, it may not be possible for you to sue us in a
      federal court because we have citizenship in all 50 U.S. states and operations
      in many states. Accordingly, you will be limited to bringing any claims in
      state
      court. Furthermore, AREP Finance, our corporate co-issuer for the notes, has
      only nominal assets and no operations. While you may be able to sue the
      corporate co-issuer in federal court, you are not likely to be able to realize
      on any judgment rendered against it.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We may be subject
      to the pension liabilities of our affiliates.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Mr.&#160;Icahn,
      through certain affiliates, currently owns 100% of API and approximately 90%
      of
      our outstanding depositary units and 86.5% of our outstanding preferred units.
      Applicable pension and tax laws make each member of a &#8220;controlled group&#8221; of
      entities, generally defined as entities in which there are at least an 80%
      common ownership interest, jointly and severally liable for certain pension
      plan
      obligations of any member of the controlled group. These pension obligations
      include ongoing contributions to fund the plan, as well as liability for any
      unfunded liabilities that may exist at the time the plan is terminated. In
      addition, the failure to pay these pension obligations when due may result
      in
      the creation of liens in favor of the pension plan or the Pension Benefit
      Guaranty Corporation, or the PBGC, against the assets of each member of the
      controlled group.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As a
      result of the more than 80% ownership interest in us by Mr.&#160;Icahn&#8217;s
      affiliates, we and our subsidiaries are subject to the pension liabilities
      of
      all entities in which Mr.&#160;Icahn has a direct or indirect ownership interest
      of at least 80%. One such entity, ACF Industries LLC, or ACF, is the sponsor
      of
      several pension plans which, as of December&#160;31, 2006, were not underfunded
      on an ongoing actuarial basis but would be underfunded by approximately
      $87.2million if those plans were terminated, as most recently reported by the
      plans&#8217; actuaries. These liabilities could increase or decrease, depending on a
      number of factors, including future changes in promised benefits, investment
      returns, and the assumptions used to calculate the liability. As members of
      the
      controlled group, we would be liable for any failure of ACF to make ongoing
      pension contributions or to pay the unfunded liabilities upon a termination
      of
      the ACF pension plans. In addition, other entities now or in the future within
      the controlled group that includes us may have pension plan obligations that
      are, or may become, underfunded and we would be liable for any failure of such
      entities to make ongoing pension contributions or to pay the unfunded
      liabilities upon a termination of such plans.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      current underfunded status of the ACF pension plans requires ACF to notify
      the
      PBGC of certain &#8220;reportable events,&#8221; such as if we cease to be a member of the
      ACF controlled group, or if we make certain extraordinary dividends or stock
      redemptions. The obligation to report could cause us to seek to delay or
      reconsider the occurrence of such reportable events.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">12</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
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  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<p></p>
</div>
    <div style="TEXT-INDENT: 18pt">
Starfire
      Holding Corporation, or Starfire, which is 100% owned by Mr.&#160;Icahn, has
      undertaken to indemnify us and our subsidiaries from losses resulting from
      any
      imposition of certain pension funding or termination liabilities that may be
      imposed on us and our subsidiaries or our assets as a result of being a member
      of the Icahn controlled group. The Starfire indemnity (which does not extend
      to
      pension liabilities of our subsidiaries that would be imposed on us as a result
      of our interest in these subsidiaries and not as a result of Mr.&#160;Icahn&#8217;s
      and his affiliates&#8217; more than 80% ownership interest in us) provides, among
      other things, that so long as such contingent liabilities exist and could be
      imposed on us, Starfire will not make any distributions to its stockholders
      that
      would reduce its net worth to below $250.0&#160;million. Nonetheless, Starfire
      may not be able to fund its indemnification obligations to us.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We are subject
      to
      the risk of possibly becoming an investment company.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Because
      we are a holding company and a significant portion of our assets may, from
      time
      to time, consist of investments in companies in which we own less than a 50%
      interest, we run the risk of inadvertently becoming an investment company that
      is required to register under the Investment Company Act of 1940, as amended,
      or
      the Investment Company Act. Registered investment companies are subject to
      extensive, restrictive and potentially adverse regulation relating to, among
      other things, operating methods, management, capital structure, dividends and
      transactions with affiliates. Registered investment companies are not permitted
      to operate their business in the manner in which we operate our business, nor
      are registered investment companies permitted to have many of the relationships
      that we have with our affiliated companies.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">In
      order not to become an investment company required to register under the
      Investment Company Act, we monitor the value of our investments and structure
      transactions with an eye toward the Investment Company Act. As a result, we
      may
      structure transactions in a less advantageous manner than if we did not have
      Investment Company Act concerns, or we may avoid otherwise economically
      desirable transactions due to those concerns. In addition, events beyond our
      control, including significant appreciation or depreciation in the market value
      of certain of our publicly traded holdings, or adverse developments with respect
      to our ownership of certain of our subsidiaries, such as our loss of control
      of
      WPI, could result in our inadvertently becoming an investment company.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">If
      it were established that we were an investment company, there would be a risk,
      among other material adverse consequences, that we could become subject to
      monetary penalties or injunctive relief, or both, in an action brought by the
      SEC, that we would be unable to enforce contracts with third parties or that
      third parties could seek to obtain rescission of transactions with us undertaken
      during the period it was established that we were an unregistered investment
      company.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We may become
      taxable as a corporation.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      believe that we have been and are properly treated as a partnership for federal
      income tax purposes. This allows us to pass through our income and deductions
      to
      our partners. However, the Internal Revenue Service, or IRS, could challenge
      our
      partnership status and we could fail to qualify as a partnership for past years
      as well as future years. Qualification as a partnership involves the application
      of highly technical and complex provisions of the Internal Revenue Code of
      1986,
      as amended, or the Code. For example, a publicly traded partnership is generally
      taxable as a corporation unless 90% or more of its gross income is &#8220;qualifying&#8221;
income, which includes interest, dividends, oil and gas revenues, real property
      rents, gains from the sale or other disposition of real property, gain from
      the
      sale or other disposition of capital assets held for the production of interest
      or dividends, and certain other items. We believe that in all prior years of
      our
      existence at least 90% of our gross income was qualifying income and we intend
      to structure our business in a manner such that at least 90% of our gross income
      will constitute qualifying income this year and in the future. However, there
      can be no assurance that such structuring will be effective in all events to
      avoid the receipt of more than 10% of non-qualifying income. If less than 90%
      of
      our gross income constitutes qualifying income, we may be subject to corporate
      tax on our net income at a federal rate of up to 35% plus possible state taxes.
      Further, if less than 90% of our gross income constituted qualifying income
      for
      past years, we may be subject to corporate level tax plus interest and possibly
      penalties. In addition, if we register under the Investment Company Act, it
      is
      likely that we would be treated as a corporation for U.S. federal income tax
      purposes. The cost of paying federal and possibly state income tax, either
      for
      past years or going forward, could be a significant liability and would reduce
      our funds available to make interest and principal payments on our debt
      securities, including the notes. To meet the qualifying income test, we may
      structure transactions in a manner that is less advantageous than if this were
      not a consideration, or we may avoid otherwise economically desirable
      transactions. Recently proposed legislation may affect the status of publicly
      traded partnerships such as AREP. Although as proposed the legislation would
      not
      impact AREP&#8217;s status as a partnership for tax purposes, it is unclear whether
      such legislation would be enacted or, if enacted, what its final form and effect
      would be.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">13</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
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  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>Risks
      Relating to Our Business</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>General</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition to the following risk factors specific to each of our businesses,
      all
      of our businesses are subject to the effects of the following:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      continued threat of
      terrorism;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">economic
      downturn;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">loss
      of any of our or our subsidiaries&#8217; key
      personnel;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      unavailability, as needed, of
      additional financing; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      unavailability of insurance at
      acceptable rates.</font></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Our acquisition
      of
      Lear will require a significant investment or may not be successfully
      completed.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">On
      February&#160;9, 2007, we entered into an agreement and plan of merger, pursuant
      to which we would acquire Lear, a publicly traded company that provides
      automotive interior systems worldwide, for aggregate consideration of
      approximately $5.2&#160;billion, including the assumption by the surviving
      entity of certain outstanding indebtedness of Lear and the refinancing of Lear&#8217;s
      existing term loan and credit facility. The consummation of the transaction
      is
      subject to regulatory approvals and shareholders vote. If we complete the
      acquisition of Lear, it would require a significant investment by us, including
      approximately $1.3&#160;billion in cash. Under the financial tests contained in
      the indentures that govern our notes described herein and the notes due 2012,
      AREP and AREH will not be able to incur additional indebtedness as a result
      of
      borrowings to finance the Lear acquisition, which may limit our flexibility
      in
      entering into future financing arrangements, including those to support our
      existing businesses or to acquire new businesses. Lear also has significant
      pension and related liabilities for which we could become liable as a member
      of
      a controlled group of entities.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      agreement with Lear permitted Lear to solicit proposals from other potential
      purchasers for 45 days after the signing of the agreement and to respond to
      offers after that date and until Lear&#8217;s stockholders approve the transaction
      with us. No competing proposals were received as of the date of this prospectus.
      We cannot assure you that we will be able to complete the transaction or that
      the completion of the transaction will be for the consideration described
      above.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Furthermore,
      the proposed transaction is subject to additional risks and uncertainties,
      including, but not limited to, the satisfaction of conditions to closing, which
      requires Lear stockholder approval and U.S. and foreign antitrust approval.
      If
      we were to complete the acquisition, Lear&#8217;s business and operations would be
      subject to various risks, including the uncertainty of its financial performance
      following completion of the proposed transaction; general conditions affecting
      the automotive industry, particularly in the United States; and general domestic
      and international market conditions.</div>

<div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">
  <p>In addition, we have been named as defendants in various lawsuits challenging
    the transaction. Specifically, a consolidated action is pending in the Court
    of Chancery of the State of Delaware which alleges, among other things, that
    the purchase price is unfair to Lear stockholders. A preliminary injunction
    was issued requiring supplemental disclosure. The supplemental disclosure
    requirement has been satisfied and, consequently, the injunction has been
    dissolved. A consolidated action filed in Michigan state court making virtually
    identical allegations was dismissed by the court because of the prior-filed
    Delaware action. Plaintiffs in the Michigan state action have filed a motion
    for reconsideration which is pending. Finally, a complaint is pending in the
    United States District Court for the Eastern District of Michigan, which alleges
    that the transaction would violate certain provisions of the Employment Retirement
    Income Security Act (referred to as the Federal Action). Motions to dismiss
    the Federal Action have been fully briefed and await disposition, as does
    plaintiff&#8217;s application for preliminary injunction. Based upon the above
    there is a risk that the transaction may be enjoined, or, if the transaction
    is completed, liability may nevertheless be imposed thereafter.</p>
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">14</div>
    <div style="MARGIN: 0pt"><br></div>
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<strong><i>Gaming</i></strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Our sale of ACEP
      may not be successfully completed.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      April&#160;22, 2007, AEP entered into a Membership Interest Purchase Agreement
      with Whitehall Street Real Estate Funds to sell all of the issued and
      outstanding membership interests of ACEP, which comprises our gaming operations.
      The transaction is subject to the approval of the Nevada Gaming Commission
      and
      the Nevada State Gaming Control Board, as well as customary conditions. The
      parties expect to close the transaction in approximately December 2007; however,
      we cannot assure you that we will be able to consummate the transaction.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>The
      following risks relate to our current gaming operations.</i></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>The gaming industry
      is highly regulated. The gaming authorities and state and municipal licensing
      authorities have significant control over our operations.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      properties currently conduct licensed gaming operations in Nevada. Various
      regulatory authorities, including the Nevada State Gaming Control Board and
      the
      Nevada Gaining Commission, require our properties to hold various licenses
      and
      registrations, findings of suitability, permits and approvals to engage in
      gaming operations and to meet requirements of suitability. These gaming
      authorities also control approval of ownership interests in gaming operations.
      These gaming authorities may deny, limit, condition, suspend or revoke our
      gaming licenses, registrations, findings of suitability or the approval of
      any
      of our ownership interests in any of our licensed gaming operations, any of
      which could have a significant adverse effect on our business, financial
      condition and results of operations, for any cause they may deem reasonable.
      If
      we violate gaming laws or regulations that are applicable to us, we may have
      to
      pay substantial fines or forfeit assets. If, in the future, we operate or have
      an ownership interest in casino gaming facilities located outside of Nevada,
      we
      would also be subject to the gaming laws and regulations of those other
      jurisdictions.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The sale
      of alcoholic beverages at our gaming properties is subject to licensing and
      regulation by local authorities. Any limitation, condition, suspension or
      revocation of, or disciplinary action with respect to, any such license would
      reduce the number of visitors to our casinos to the extent the availability
      of
      alcoholic beverages is important to them. Any reduction in our number of
      visitors will reduce our revenue and cash flow.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Rising operating
      costs for our gaming properties could have a negative impact on our
      profitability.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      operating expenses associated with our gaming properties could increase due
      to
      some of the following factors:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">our
      properties use significant amounts of
      electricity, natural gas and other forms of energy, and energy price increases
      may reduce our profitability;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">our
      properties use significant amounts of
      water and a water shortage may adversely affect our operations;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">some
      of our employees are covered by
      collective bargaining agreements and we may incur higher costs or work
      slow-downs or stoppages due to union activities; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">our
      reliance on slot machine revenues and
      the concentration of manufacturing of slot machines in certain companies could
      impose additional costs on us.</font></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We face substantial
      competition in the gaming industry.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      gaming industry in general, and the markets in which we compete in particular,
      are highly competitive:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">we
      compete with many world-class
      destination resorts with greater name recognition and different attractions,
      amenities and entertainment options;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">we
      compete with the continued growth of
      gaming on Native American tribal lands;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      existence of legalized gambling in
      other jurisdictions may reduce the number of visitors to our
      properties;</font></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">15</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>
    <div style="PADDING-LEFT: 36pt; FONT-SIZE: 8pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">certain
      states have legalized, and others
      may legalize, casino gaming in specific venues, including race tracks and/or
      in
      specific areas, including metropolitan areas from which we traditionally attract
      customers; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">our
      properties also compete, and will in
      the future compete, with all forms of legalized gambling.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Many
      of
      our competitors have greater financial, selling and marketing, technical and
      other resources than we do. We may not be able to compete effectively with
      our
      competitors and we may lose market share, which could reduce our revenue and
      cash flow.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We cannot guarantee
      that we will be able to recover our investment made in connection with the
      acquisition of the Aquarius.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      May&#160;19, 2006, our wholly owned subsidiary, AREP Laughlin Corporation,
      acquired the Aquarius Casino Resort, or the Aquarius, from affiliates of
      Harrah&#8217;s Operating Company, Inc., or Harrah&#8217;s, for approximately
      $113.6&#160;million, including working capital. Acquisitions generally involve
      significant risks, including difficulties in the assimilation of the operations,
      services and corporate culture of the acquired company.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Pursuant
      to Membership Interest Purchase Agreement that AEP has entered into with
      Whitehall Street Real Estate Funds to sell the issued and outstanding membership
      interests of ACEP, we have agreed to make capital expenditures, including
      $10.5&#160;million through 2007 to refurbish rooms, upgrade amenities and
      acquire new gaming equipment for the Aquarius.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">There
      can
      be no assurance that this acquisition will be profitable or that we will be
      able
      to recover our investments either upon the sale of ACEP or, if the sale is
      not
      consummated, in our future gaming operations. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Real Estate
      Operations</i></strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Our investment
      in
      property development may be more costly than anticipated.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      invested and expect to continue to invest in unentitled land, undeveloped land
      and distressed development properties. These properties involve more risk than
      properties on which development has been completed. Unentitled land may not
      be
      approved for development. These investments do not generate any operating
      revenue, while costs are incurred to obtain government approvals and develop
      the
      properties. Construction may not be completed within budget or as scheduled
      and
      projected rental levels or sales prices may not be achieved and other
      unpredictable contingencies beyond our control could occur. We will not be
      able
      to recoup any of such costs until such time as these properties, or parcels
      thereof, are either disposed of or developed into income-producing assets.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We may be subject
      to environmental liability as an owner or operator of development and rental
      real estate.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Under
      various federal, state and local laws, ordinances and regulations, an owner
      or
      operator of real property may become liable for the costs of removal or
      remediation of certain hazardous substances, pollutants and contaminants
      released on, under, in or from its property. These laws often impose liability
      without regard to whether the owner or operator knew of, or was responsible
      for,
      the release of such substances. To the extent any such substances are found
      in
      or on any property invested in by us, we could be exposed to liability and
      be
      required to incur substantial remediation costs. The presence of such substances
      or the failure to undertake proper remediation may adversely affect the ability
      to finance, refinance or dispose of such property. We generally conduct a Phase
      I environmental site assessment on properties in which we are considering
      investing. A Phase I environmental site assessment involves record review,
      visual site assessment and personnel interviews, but does not typically include
      invasive testing procedures such as air, soil or groundwater sampling or other
      tests performed as part of a Phase II environmental site assessment.
      Accordingly, there can be no assurance that these assessments will disclose
      all
      potential liabilities or that future property uses or conditions or changes
      in
      applicable environmental laws and regulations or activities at nearby properties
      will not result in the creation of environmental liabilities with respect to
      a
      property.</div>
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    <div style="MARGIN: 0pt" align="center">16</div>
    <div style="MARGIN: 0pt"><br></div>
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<strong><i>Home
      Fashion Operations</i></strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Pending legal
      proceedings may result in our ownership of WPI&#8217;s common stock being reduced to
      less than 50%. A legal action in Delaware challenges the issuance to of the
      preferred stock of WPI. Uncertainties arising from these proceedings may
      adversely affect WPI&#8217;s operations and prospects and the value of our investment
      in it.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      currently own approximately 67.7% of the outstanding shares of common stock
      and
      100% of the preferred stock of WPI. As a result of the decision of the U.S.
      District Court for the Southern District of New York reversing certain
      provisions of the Bankruptcy Court order pursuant to which we acquired our
      ownership of a majority of the common stock of WPI, the proceedings in the
      Bankruptcy Court on remand and the proceedings in the Delaware action, our
      percentage of the outstanding shares of common stock of WPI could be reduced
      to
      less than 50% and perhaps substantially less and our ownership of the preferred
      stock of WPI could also be affected. The Bankruptcy Court entered a stay of
      its
      order on remand. On May 9, 2007, the District Court issued an order conditioning
      the continuation of the Bankrupcty Court&#8217;s stay on the posting of a bond. No
      bond was posted. On May 22, 2007, WPI, its subsidiary WestPoint Home, Inc.,
      and
      we filed a Petition for a Writ of Mandamus in the U.S. Court of Appeals for
      the
      Second Circuit requesting, among other relief, the reinstatement of the Sale
      Order. The Second Circuit scheduled oral argument on the Petition for Mandamus
      for June 26, 2007 and reinstated the stay pending its decision. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If we
      were to lose control of WPI, it could adversely affect the business and
      prospects of WPI and the value of our investment in it. In addition, we
      consolidated the balance sheet of WPI as of March 31, 2007 and WPI&#8217;s results of
      operations for the period from the date of acquisition through March 31, 2007.
      If we were to own less than 50% of the outstanding common stock or the challenge
      to our preferred stock ownership is successful, we would have to evaluate
      whether we should consolidate WPI and if so our financial statements could
      be
      materially different than as presented as of March 31, 2007, December 31, 2006
      and December 31, 2005 and for the periods then ended.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>WPI acquired
      its
      business from the former owners through bankruptcy proceedings. We cannot assure
      you that it will be able to operate profitably.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">WPI
      acquired the assets of WestPoint Stevens Inc., or WestPoint Stevens, as part
      of
      its bankruptcy proceedings. Certain of the issues that contributed to WestPoint
      Stevens&#8217; filing for bankruptcy, such as intense industry competition, the
      inability to produce goods at a cost competitive with overseas suppliers, the
      increasing prevalence of direct sourcing by principal customers and continued
      incurrence of overhead costs associated with an enterprise larger than the
      current business can profitably support, continue to exist and may continue
      to
      affect WPI&#8217;s business operations and financial condition adversely. In addition,
      during the protracted bankruptcy proceedings of WestPoint Stevens, several
      of
      its customers reduced the volume of business done with WestPoint Stevens. We
      have installed new management to address these issues, but we cannot assure
      you
      that new management will be effective.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">WPI
      operated at a loss during fiscal year 2006 as well as for the three months
      ended
      March&#160;31, 2007, and we expect that WPI will continue to operate at a loss
      during fiscal year 2007. We cannot assure you that it will be able to operate
      profitably in the future.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>The loss of any
      of
      WPI&#8217;s large customers could have an adverse effect on WPI&#8217;s
      business.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">During
      fiscal year 2006 and the three-month period ended March&#160;31, 2007, WPI&#8217;s six
      largest customers accounted for approximately 50% and 52%, respectively, of
      its
      net sales. Other retailers have indicated that they intend to significantly
      increase their direct sourcing of home fashion products from foreign sources.
      The loss of any of WPI&#8217;s largest accounts, or a material portion of sales to
      those accounts, would have an adverse effect upon its business, which could
      be
      material.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>A portion of
      WPI&#8217;s
      sales are derived from licensed designer brands. The loss of a significant
      license could have an adverse effect on WPI&#8217;s business.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">A portion
      of WPI&#8217;s sales is derived from licensed designer brands. The license agreements
      for WPI&#8217;s designer brands generally are for a term of two or three years. Some
      of the licenses are automatically renewable for additional periods, provided
      that sales thresholds set forth in the license agreements are met. The loss
      of a
      significant license could have an adverse effect upon WPI&#8217;s business, which
      effect could be material. Under certain circumstances, these licenses can be
      terminated without WPI&#8217;s consent due to circumstances beyond WPI&#8217;s
      control.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">17</div>
    <div style="MARGIN: 0pt"><br></div>
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<strong><i>A
      shortage of the principal raw materials WPI uses to manufacture its products
      could force WPI to pay more for those materials and, possibly, cause WPI to
      increase its prices, which could have an adverse effect on WPI&#8217;s
      operations.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Any
      shortage in the raw materials WPI uses to manufacture its products could
      adversely affect its operations. The principal raw materials that WPI uses
      in
      the manufacture of its products are cotton of various grades and staple lengths
      and polyester and nylon in staple and filament form. Since cotton is an
      agricultural product, its supply and quality are subject to weather patterns,
      disease and other factors. The price of cotton is also influenced by supply
      and
      demand considerations, both domestically and worldwide, and by the cost of
      polyester. Although WPI has been able to acquire sufficient quantities of cotton
      for its operations in the past, any shortage in the cotton supply by reason
      of
      weather patterns, disease or other factors, or a significant increase in the
      price of cotton, could adversely affect its operations. The price of man-made
      fibers, such as polyester and nylon, is influenced by demand, manufacturing
      capacity and costs, petroleum prices, cotton prices and the cost of polymers
      used in producing these fibers. In particular, the effect of increased energy
      prices may have a direct impact upon the cost of dye and chemicals, polyester
      and other synthetic fibers. Any significant prolonged petrochemical shortages
      could significantly affect the availability of man-made fibers and could cause
      a
      substantial increase in demand for cotton. This could result in decreased
      availability of cotton and possibly increased prices and could adversely affect
      WPI&#8217;s operations.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>The home fashion
      industry is highly competitive and WPI&#8217;s success depends on WPI&#8217;s ability to
      compete effectively in the market.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The home
      fashion industry is highly competitive. WPI&#8217;s future success will, to a large
      extent, depend on its ability to remain a low-cost producer and to remain
      competitive. WPI competes with both foreign and domestic companies on, among
      other factors, the basis of price, quality and customer service. In the home
      fashion market, WPI competes with many companies. WPI&#8217;s future success depends
      on its ability to remain competitive in the areas of marketing, product
      development, price, quality, brand names, manufacturing capabilities,
      distribution and order processing. We cannot assure you of WPI&#8217;s ability to
      compete effectively in any of these areas. Any failure to compete effectively
      could adversely affect WPI&#8217;s sales and, accordingly, its operations.
      Additionally, the easing of trade restrictions over time has led to growing
      competition from low priced products imported from Asia and Latin America.
      The
      lifting of import quotas in 2005 has accelerated the loss of WPI&#8217;s market share.
      There can be no assurance that the foreign competition will not grow to a level
      that could have an adverse effect upon WPI&#8217;s ability to compete
      effectively.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>WPI intends to
      increase the percentage of its products that are made overseas. There is no
      assurance that WPI will be successful in obtaining goods of sufficient quality
      on a timely basis and on advantageous terms. WPI will be subject to additional
      risks relating to doing business overseas.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">WPI
      intends to increase the percentage of its products that are made overseas and
      may face additional risks associated with these efforts. Adverse factors that
      WPI may encounter include:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">logistical
      challenges caused by
      distance;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">language
      and cultural
      differences;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">legal
      and regulatory
      restrictions;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      difficulty of enforcing agreements with
      overseas suppliers;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">currency
      exchange rate
      fluctuations;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">political
      and economic instability;
      and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">potential
      adverse tax
      consequences.</font></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>There has been
      consolidation of retailers of WPI&#8217;s products that may reduce its
      profitability.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Retailers
      of consumer goods have become fewer and more powerful over time. As buying
      power
      has become more concentrated, pricing pressure on vendors has grown. With the
      ability to buy imported products directly from foreign sources, retailers&#8217;
pricing leverage has increased and also allowed for growth in private label
      brands that displace and compete with WPI proprietary brands. Retailers&#8217; pricing
      leverage has resulted in a decline in WPI&#8217;s </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">18</div>
    <div style="MARGIN: 0pt"><br></div>
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unit
      pricing and margins and resulted in a shift in product mix to more private
      label
      programs. If WPI is unable to diminish the decline in its pricing and margins,
      it may not be able to achieve or maintain profitability.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>WPI is subject
      to
      various federal, state and local environmental and health and safety laws and
      regulations. If it does not comply with these regulations, it may incur
      significant costs in the future to become compliant.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">WPI is
      subject to various federal, state and local laws and regulations governing,
      among other things, the discharge, storage, handling, usage and disposal of
      a
      variety of hazardous and non-hazardous substances and wastes used in, or
      resulting from, its operations, including potential remediation obligations
      under those laws and regulations. WPI&#8217;s operations are also governed by federal,
      state and local laws and regulations relating to employee safety and health
      which, among other things, establish exposure limitations for cotton dust,
      formaldehyde, asbestos and noise, and which regulate chemical, physical and
      ergonomic hazards in the workplace. Consumer product safety laws, regulations
      and standards at the federal and state level govern the manufacture and sale
      of
      products by WPI. Although WPI does not expect that compliance with any of these
      laws and regulations will adversely affect its operations, we cannot assure
      you
      that regulatory requirements will not become more stringent in the future or
      that WPI will not incur significant costs to comply with those
      requirements.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Investments</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>We may not be
      able
      to identify suitable investments, and our investments may not result in
      favorable returns or may result in losses.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      partnership agreement allows us to take advantage of investment opportunities
      we
      believe exist outside of our operating businesses. The equity securities in
      which we may invest may include common stock, preferred stock and securities
      convertible into common stock, as well as warrants to purchase these securities.
      The debt securities in which we may invest may include bonds, debentures, notes,
      or non-rated mortgage-related securities, municipal obligations, bank debt
      and
      mezzanine loans. Certain of these securities may include lower rated or
      non-rated securities which may provide the potential for higher yields and
      therefore may entail higher risk and may include the securities of bankrupt
      or
      distressed companies. In addition, we may engage in various investment
      techniques, including derivatives, options and futures transactions, foreign
      currency transactions, &#8220;short&#8221; sales and leveraging for either hedging or other
      purposes. We may concentrate our activities by owning significant or controlling
      interest in certain investments. We may not be successful in finding suitable
      opportunities to invest our cash and our strategy of investing in undervalued
      assets may expose us to numerous risks.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Our investments
      may
      be subject to significant uncertainties.</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      investments may not be successful for many reasons including, but not limited
      to:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">fluctuation
      of interest rates;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">lack
      of control in minority
      investments;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">worsening
      of general economic and market
      conditions;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">lack
      of diversification;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">fluctuation
      of U.S. dollar exchange rates;
      and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">adverse
      legal and regulatory developments
      that may affect particular businesses.</font></div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">19</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

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<strong><a name="5"></a>USE
  OF PROCEEDS</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We will
      not receive any proceeds from the exchange of the new notes for the private
      notes pursuant to the exchange offer. On January&#160;17, 2007, we issued and
      sold the private notes in a private offering, receiving net proceeds of
      approximately $492.1 million, after deducting selling and offering
      expenses.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We intend
      to use the net proceeds of the private offering for general business purposes,
      including to pursue our primary business strategy of acquiring undervalued
      assets in either our existing lines of business or other businesses and to
      provide additional capital to grow our existing business.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We will
      use the net proceeds of the private offering and conduct our activities in
      a
      manner so as not to be deemed an investment company under the Investment Company
      Act. Generally, this means that we do not intend to enter the business of
      investing in securities and that no more than 40% of our total assets will
      be
      invested in securities. The portion of our assets invested in each type of
      security or any single issuer or industry will not be limited.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">20</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

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<strong><a name="6"></a>THE
  EXCHANGE OFFER</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Purpose of the
      Exchange Offer</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      connection with the sale of the private notes, we and the initial purchaser
      entered into a registration rights agreement in which we and AREH agreed
      to:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">file
      a registration statement with the SEC
      with respect to the exchange of the private notes for new notes, or the exchange
      offer registration statement, no later than July&#160;16, 2007;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">use
      all commercially reasonable efforts to
      have the exchange offer registration statement declared effective by the SEC
      on
      or prior to November&#160;13, 2007; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">commence
      the offer to exchange new notes
      for the private notes and use all commercially reasonable efforts to issue
      on or
      prior to 30 business days, or longer if required by the federal securities
      laws,
      after the date on which the exchange offer registration statement was declared
      effective by the SEC, new notes in exchange for all private notes tendered
      prior
      to that date in the exchange offer.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We are
      making the exchange offer to satisfy certain of our obligations under the
      registration rights agreement. We filed a copy of the registration rights
      agreement as an exhibit to the exchange offer registration statement that
      includes this prospectus.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Resale of Exchange
      Notes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Under
      existing interpretations of the Securities Act by the staff of the SEC contained
      in several no-action letters to third parties, we believe that the new notes
      will generally be freely transferable by holders who have validly participated
      in the exchange offer without further registration under the Securities Act
      (assuming the truth of certain representations required to be made by each
      holder of notes, as set forth below). For additional information on the staff&#8217;s
      position, we refer you to the following no-action letters: Exxon Capital
      Holdings Corporation, available April&#160;13, 1988; Morgan Stanley &amp; Co.
      Incorporated, available June&#160;5, 1991; and Shearman &amp; Sterling,
      available July&#160;2, 1993. However, any purchaser of private notes who is one
      of our &#8220;affiliates&#8221; or who intends to participate in the exchange offer for the
      purpose of distributing the new notes or who is a broker-dealer who purchased
      private notes from us to resell pursuant to Rule 144A or any other available
      exemption under the Securities Act:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">will
      not be able to tender its private
      notes in the exchange offer;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">will
      not be able to rely on the
      interpretations of the staff of the SEC; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">must
      comply with the registration and
      prospectus delivery requirements of the Securities Act in connection with any
      sale or transfer of the private notes unless such sale or transfer is made
      pursuant to an exemption from these requirements.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If you
      wish to exchange private notes for new notes in the exchange offer, you will
      be
      required to make representations in a letter of transmittal which accompanies
      this prospectus, including that:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">you
      are not our &#8220;affiliate&#8221; (as defined in
      Rule 405 promulgated under the Securities Act);</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">any
      new notes to be received by you will be
      acquired in the ordinary course of your business;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">you
      have no arrangement or understanding
      with any person to participate in the distribution of the new notes in violation
      of the provisions of the Securities Act;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">if
      you are not a broker-dealer, you are not
      engaged in, and do not intend to engage in, a distribution of new notes;
      and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">if
      you are a broker-dealer, you acquired
      the private notes for your own account as a result of market-making or other
      trading activities (and as such, you are a &#8220;participating broker-dealer&#8221;), you
      have not entered into any arrangement or understanding with AREP or an affiliate
      of AREP to distribute the new notes and you will deliver a prospectus meeting
      the requirements of the Securities Act in connection with any resale of the
      new
      notes.</font></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">21</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
</div>
    <div style="TEXT-INDENT: 18pt">
Rule
      405 promulgated under the Securities Act provides that an &#8220;affiliate&#8221; of, or
      person &#8220;affiliated&#8221; with, a specified person, is a person that directly, or
      indirectly through one or more intermediaries, controls or is controlled by,
      or
      is under common control with, the person specified.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The SEC
      has taken the position that participating broker-dealers may be deemed to be
      &#8220;underwriters&#8221; within the meaning of the Securities Act, and accordingly may
      fulfill their prospectus delivery requirements with respect to the new notes,
      other than a resale of an unsold allotment from the original sale of the notes,
      with the prospectus contained in the exchange offer registration statement.
      Under the registration rights agreement, we have agreed to use commercially
      reasonable efforts to allow participating broker-dealers and other persons,
      if
      any, subject to similar prospectus delivery requirements, to use the prospectus
      contained in the exchange offer registration statement in connection with the
      resale of the new notes for a period of 270 days from the issuance of the new
      notes.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Terms of the Exchange
      Offer</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">This
      prospectus and the accompanying letter of transmittal contain the terms and
      conditions of the exchange offer. Upon the terms and subject to the conditions
      set forth in this prospectus and in the accompanying letter of transmittal,
      we
      will accept for exchange all private notes which are properly tendered and
      not
      withdrawn on or prior to 5:00 p.m., New York City time, on the expiration date.
      After authentication of the new notes by the trustee or an authentication agent,
      we will issue and deliver $1,000 principal amount of new notes in exchange
      for
      each $1,000 principal amount of outstanding private notes accepted in the
      exchange offer. Holders may tender some or all of their private notes in the
      exchange offer in denominations of $1,000 and integral multiples thereof.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The form
      and terms of the new notes are identical in all material respects to the form
      and terms of the private notes, except that:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">1.</div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt">the offering of the new notes has
      been registered under the Securities Act;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">2.</div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt">the new notes generally will not
      be
      subject to transfer restrictions or have registration rights; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">3.</div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt">certain provisions relating to
      liquidated damages on the private notes provided for under certain circumstances
      will be eliminated.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The new
      notes will evidence the same debt as the private notes. The new notes will
      be
      issued under and entitled to the benefits of the indenture.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      the
      date of this prospectus, $500&#160;million in aggregate principal amount of the
      additional private notes issued on January&#160;17, 2007 is outstanding. In
      connection with the issuance of the private notes, we made arrangements for
      the
      private notes to be issued and transferable in book-entry form through the
      facilities of DTC, acting as a depositary. The new notes will also be issuable
      and transferable in book-entry form through the DTC.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      exchange offer is not conditioned upon any minimum aggregate principal amount
      of
      private notes being tendered. However, our obligation to accept private notes
      for exchange pursuant to the exchange offer is subject to certain customary
      conditions that we describe under &#8220;&#8212; Conditions&#8221; below.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Holders
      who tender private notes in the exchange offer will not be required to pay
      brokerage commissions or fees or, subject to the instructions in the letter
      of
      transmittal, transfer taxes with respect to the exchange of private notes
      pursuant to the exchange offer. We will pay all charges and expenses, other
      than
      certain applicable taxes, in connection with the exchange offer. See &#8220;&#8212;
Solicitation of Tenders; Fees and Expenses&#8221; for more detailed information
      regarding the expenses of the exchange offer.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">By
      executing or otherwise becoming bound by the letter of transmittal, you will
      be
      making the representations described under &#8220;&#8212; Procedures for Tendering&#8221;
below.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Expiration Date;
      Extensions; Amendments</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: 18pt">The
      term &#8220;expiration date&#8221; will mean 5:00 p.m., New York City time, on</div>
    <div style="MARGIN: 0pt; TEXT-INDENT: 324pt">, 2007, unless we, in our sole
      discretion, extend the exchange offer, in which case the term &#8220;expiration date&#8221;
will mean the latest date and time to which we extend the exchange offer.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">To extend
      the exchange offer, we will:</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">22</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: -10pt; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 10pt">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
</div>
    <div style="PADDING-LEFT: 36pt; FONT-SIZE: 8pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>

    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt; FONT-FAMILY: Times New (W1)"><font style="FONT-FAMILY: Times New (W1)">notify
      the exchange agent of any extension
      orally or in writing; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">notify
      the registered holders of the
      private notes by means of a press release or other public announcement, each
      before 9:00 a.m., New York City time, on the next business day after the
      previously scheduled expiration date.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      reserve the right, in our reasonable discretion:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">to
      delay accepting any private
      notes;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">to
      extend the exchange offer;
      or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">if
      any conditions listed below under &#8220;&#8212;
Conditions&#8221; are not satisfied, to terminate the exchange offer by giving oral or
      written notice of the delay, extension or termination to the exchange
      agent.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We will
      follow any delay in acceptance, extension or termination as promptly as
      practicable by oral or written notice to the registered holders. If we amend
      the
      exchange offer in a manner we determine constitutes a material change, we will
      promptly disclose the amendment in a prospectus supplement that we will
      distribute to the registered holders.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Interest on the New
      Notes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Interest
      on the new notes will accrue from the last interest payment date on which
      interest was paid on the private notes surrendered in exchange for new notes
      or,
      if no interest has been paid on the private notes, from the issue date of the
      private notes, January&#160;17, 2007. Interest on the new notes will be payable
      semi-annually on February&#160;15 and August&#160;15 of each year, commencing on
      February&#160;15, 2007.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Procedures for
      Tendering</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">You may
      tender your private notes in the exchange offer only if you are a registered
      holder of private notes. To tender in the exchange offer, you must:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">complete,
      sign and date the letter of
      transmittal or a facsimile of the letter of transmittal;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">have
      the signatures thereof guaranteed if
      required by the letter of transmittal; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">mail
      or otherwise deliver the letter of
      transmittal or such facsimile to the exchange agent, at the address listed
      below
      under &#8220;&#8212; Exchange Agent&#8221; for receipt prior to the expiration date.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition, either:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      exchange agent must receive
      certificates for the private notes along with the letter of transmittal into
      its
      account at DTC pursuant to the procedure described under &#8220;&#8212; Book-Entry Transfer&#8221;
before the expiration date;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      exchange agent must receive a timely
      confirmation of a book-entry transfer, if the procedure is available, into
      its
      account at DTC pursuant to the procedure described under &#8220;&#8212; Book-Entry Transfer&#8221;
before the expiration date; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">you
      must comply with the procedures
      described under &#8220;Guaranteed Delivery Procedures.&#8221;</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Your
      tender, if not withdrawn before the expiration date, will constitute an
      agreement between you and us in accordance with the terms and subject to the
      conditions described in this prospectus and in the letter of transmittal.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      method of delivery of private notes and the letter of transmittal and all other
      required documents to the exchange agent is at your election and risk. We
      recommend that, instead of delivery by mail, you use an overnight or hand
      delivery service. In all cases, you should allow sufficient time to ensure
      delivery to the exchange agent prior to the expiration date. You should not
      send
      letters of transmittal or private notes to us. You may request that your
      respective brokers, dealers, commercial banks, trust companies or nominees
      effect the transactions described above for you.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If you
      are a beneficial owner whose private notes are registered in the name of a
      broker, dealer, commercial bank, trust company or other nominee and you wish
      to
      tender your private notes, you should contact such registered </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">23</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
holder
      promptly and instruct such registered holder to tender on your behalf. If you
      wish to tender on your own behalf, prior to completing and executing the letter
      of transmittal and delivering your private notes, you must either:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">make
      appropriate arrangements to register
      ownership of your private notes in your name; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">obtain
      a properly completed bond power from
      the registered holder.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      transfer of record ownership may take considerable time unless private notes
      are
      tendered:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">by
      a registered holder who has not
      completed the box entitled &#8220;Special Registration Instructions&#8221; or &#8220;Special
      Delivery Instruction&#8221; on the letter of transmittal; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">for
      the account of an &#8220;Eligible
      Institution&#8221; which is either:</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">a
      member firm of a registered national
      securities exchange or of the National Association of Securities Dealers,
      Inc.;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">a
      commercial bank or trust company located
      or having an office or correspondent in the United States; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">otherwise
      an &#8220;eligible guarantor
      institution&#8221; within meaning of Rule 17Ad-15 under the Exchange Act.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">An
      Eligible Institution must guarantee the signatures on a letter of transmittal
      or
      a notice of withdrawal described below under &#8220;&#8212; Withdrawal of Tenders.&#8221;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If the
      letter of transmittal is signed by a person other than the registered holder,
      such private notes must be endorsed or accompanied by appropriate bond powers
      which authorize such person to tender the private notes on behalf of the
      registered holder, in either case signed as the name of the registered holder
      or
      holders appears on the private notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If the
      letter of transmittal or any private notes or bond powers are signed or endorsed
      by trustees, executors, administrators, guardians, attorneys-in-fact, officers
      of corporations or others acting in a fiduciary or representative capacity,
      such
      persons should so indicate when signing, and unless waived by us, they must
      submit evidence satisfactory to us of their authority to so act with the letter
      of transmittal.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      letter of transmittal will include representations to us as set forth under
      &#8220;Resale of Exchange Notes.&#8221;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">You
      should note that:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">all
      questions as to the validity, form,
      eligibility, including time of receipt, acceptance and withdrawal of the
      tendered private notes will be determined by us in our sole discretion, which
      determination will be final and binding;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">we
      reserve the absolute right to reject any
      and all private notes not properly tendered or any private notes the acceptance
      of which would, in our judgment or the judgment of our counsel, be
      unlawful;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">we
      also reserve the absolute right to waive
      any irregularities or conditions of tender as to particular private notes.
      Our
      interpretation of the terms and conditions of the exchange offer, including
      the
      instructions in the letter of transmittal, will be final and binding on all
      parties. Unless waived, any defects or irregularities in connection with tenders
      of private notes must be cured within such time as we shall
      determine;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">although
      we intend to notify holders of
      defects or irregularities with respect to any tender of private notes, neither
      we, the exchange agent nor any other person shall be under any duty to give
      notification of any defect or irregularity with respect to tenders of private
      notes, nor shall any of them incur any liability for failure to give such
      notification; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">tenders
      of private notes will not be deemed
      to have been made until such irregularities have been cured or waived. Any
      private notes received by the exchange agent that we determine are not properly
      tendered or the tender of which is otherwise rejected by us and as to which
      the
      defects or irregularities have not been cured or waived by us will be returned
      by the exchange agent to the tendering holder unless otherwise provided in
      the
      letter of transmittal, as soon as practicable following the expiration
      date.</font></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">24</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>Book-Entry
      Transfer</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      exchange agent will make a request promptly after the date of this prospectus
      to
      establish accounts with respect to the private notes at DTC for the purpose
      of
      facilitating the exchange offer. Any financial institution that is a participant
      in DTC&#8217;s system may make book-entry delivery of private notes by causing DTC to
      transfer such private notes into the exchange agent&#8217;s account with respect to
      the private notes in accordance with DTC&#8217;s Automated Tender Offer Program
      procedures for such transfer. However, the exchange for the private notes so
      tendered will only be made after timely confirmation of such book-entry transfer
      of private notes into the exchange agent&#8217;s account, and timely receipt by the
      exchange agent of an agent&#8217;s message and any other documents required by the
      letter of transmittal. The term &#8220;agent&#8217;s message&#8221; means a message, transmitted
      by DTC and received by the exchange agent and forming a part of the confirmation
      of a book-entry transfer, which states that DTC has received an express
      acknowledgment from a participant that is tendering private notes that such
      participant has received the letter of transmittal and agrees to be bound by
      the
      terms of the letter of transmittal, and that we may enforce such agreement
      against the participant.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Although
      delivery of private notes may be effected through book-entry transfer into
      the
      exchange agent&#8217;s account at DTC, you must transmit and the exchange agent must
      receive, the letter of transmittal (or facsimile thereof) properly completed
      and
      duly executed with any required signature guarantee and all other required
      documents prior to the expiration date, or you must comply with the guaranteed
      delivery procedures described below. Delivery of documents to DTC does not
      constitute delivery to the exchange agent.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Guaranteed Delivery
      Procedures</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If you
      wish to tender your private notes but your private notes are not immediately
      available, or time will not permit your private notes or other required
      documents to reach the exchange agent before the expiration date, or the
      procedure for book-entry transfer cannot be completed on a timely basis, you
      may
      affect a tender if:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">1.</div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt">the tender is made through an
      Eligible Institution;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">2.</div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt">prior to the expiration date, the
      exchange agent receives from such Eligible Institution a properly completed
      and
      duly executed notice of guaranteed delivery, by facsimile transmittal, mail
      or
      hand delivery:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 54.15pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18.15pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 54.15pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">stating
      the name and address of the holder,
      the certificate number or numbers of such holder&#8217;s private notes and the
      principal amount of such private notes tendered;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 54.15pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18.15pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 54.15pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">stating
      that the tender is being made
      thereby; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 54.15pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18.15pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 54.15pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">guaranteeing
      that, within three New York
      Stock Exchange trading days after the expiration date, the letter of
      transmittal, or a facsimile thereof, together with the certificate(s)
      representing the private notes to be tendered in proper form for transfer,
      or
      confirmation of a book-entry transfer into the exchange agent&#8217;s account at DTC
      of private notes delivered electronically, and any other documents required
      by
      the letter of transmittal, will be deposited by the Eligible Institution with
      the exchange agent; and</font></div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">3.</div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt">such properly completed and
      executed letter of transmittal, or a facsimile thereof, together with the
      certificate(s) representing all tendered private notes in proper form for
      transfer, or confirmation of a book-entry transfer into the exchange agent&#8217;s
      account at DTC of private notes delivered electronically and all other documents
      required by the letter of transmittal are received by the exchange agent within
      three New York Stock Exchange trading days after the expiration date.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Upon
      request, the exchange agent will send to you a notice of guaranteed delivery
      if
      you wish to tender your private notes according to the guaranteed delivery
      procedures described above.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Withdrawal of
      Tenders</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Except
      as
      otherwise provided in this prospectus, you may withdraw tenders of private
      notes
      at any time prior to the expiration date.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For a
      withdrawal to be effective, the exchange agent must receive a written or
      facsimile transmission notice of withdrawal at its address set forth this
      prospectus prior to the expiration date. Any such notice of withdrawal
      must:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">specify
      the name of the person who
      deposited the private notes to be withdrawn;</font></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">25</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: -10pt; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 10pt">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
</div>
    <div style="PADDING-LEFT: 36pt; FONT-SIZE: 8pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>

    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt; FONT-FAMILY: Times New (W1)"><font style="FONT-FAMILY: Times New (W1)">identify
      the private notes to be withdrawn,
      including the certificate number or number and principal amount of such private
      notes or, in the case of private notes transferred by book-entry transfer,
      the
      name and number of the account at DTC to be credited; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">be
      signed in the same manner as the
      original signature on the letter of transmittal by which such private notes
      were
      tendered, including any required signature guarantee.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We will
      determine in our sole discretion all questions as to the validity, form and
      eligibility, including time of receipt, of such withdrawal notices, and our
      determination shall be final and binding on all parties. We will not deem any
      properly withdrawn private notes to have been validly tendered for purposes
      of
      the exchange offer, and we will not issue new notes with respect those private
      notes unless you validly retender the withdrawn private notes. You may retender
      properly withdrawn private notes following one of the procedures described
      above
      under <br>&#8220;&#8212; Procedures for Tendering&#8221; at any time prior to the expiration
      date.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Conditions</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Notwithstanding
      any other term of the exchange offer, we will not be required to accept for
      exchange, or exchange the new notes for, any private notes, and may terminate
      the exchange offer as provided in this prospectus before the acceptance of
      the
      private notes, if:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      exchange offer violates applicable law,
      rules or regulations or an applicable interpretation of the staff of the
      SEC;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">an
      action or proceeding has been instituted
      or threatened in any court or by any governmental agency which might materially
      impair our ability to proceed with the exchange offer;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">there
      has been proposed, adopted or enacted
      any law, rule or regulation that, in our reasonable judgment would impair
      materially our ability to consummate the exchange offer; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">all
      governmental approvals which we deem
      necessary for the completion of the exchange offer have not been
      obtained.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If we
      determine in our reasonable discretion that any of these conditions are not
      satisfied, we may:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">refuse
      to accept any private notes and
      return all tendered private notes to you;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">extend
      the exchange offer and retain all
      private notes tendered before the exchange offer expires, subject, however,
      to
      your rights to withdraw the private notes; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">waive
      the unsatisfied conditions with
      respect to the exchange offer and accept all properly tendered private notes
      that have not been withdrawn.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If the
      waiver constitutes a material change to the exchange offer, we will promptly
      disclose the waiver by means of a prospectus supplement that we will distribute
      to the registered holders of the private notes.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Exchange
      Agent</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      appointed Wilmington Trust Company, the trustee under the indenture, as exchange
      agent for the exchange offer. You should send all executed letters of
      transmittal to the exchange agent at one of the addresses set forth below.
      In
      such capacity, the exchange agent has no fiduciary duties and will be acting
      solely on the basis of directions of our company. You should direct questions,
      requests for assistance and requests for additional copies of this prospectus
      or
      of the letter of transmittal and requests for a notice of guaranteed delivery
      to
      the exchange agent addressed as follows:</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt" align="center"><strong><i>By
      Certified or Registered Mail:<br></i></strong>Wilmington Trust Company<br>Rodney
      Square North<br>1100 North Market Street<br>Wilmington, DE
      19890-1626<br>Attention: Alisha Clendaniel</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">26</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong><i>By
      Overnight Courier or Hand Delivery:<br></i></strong>Wilmington Trust
      Company<br>Rodney Square North<br>1100 North Market Street<br>Wilmington, DE
      19890-1626<br>Attention: Alisha Clendaniel</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt" align="center"><strong><i>By
      Facsimile:<br></i></strong>(302) 636-4139<br>Attention: Exchanges</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt" align="center"><strong><i>Confirm
      By Telephone:<br></i></strong>(302)
      636-6470<br>For Information Call<br>(302) 636-6470</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Delivery
      to an address or facsimile number other than those listed above will not
      constitute a valid delivery.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      trustee does not assume any responsibility for and makes no representation
      as to
      the validity or adequacy of this prospectus or the notes.</div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 0pt"><strong>Solicitation of
      Tenders; Fees and Expenses</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      will pay all expenses of soliciting tenders pursuant to the exchange offer.
      We
      are making the principal solicitation by mail. Our officers and regular
      employees may make additional solicitations in person or by telephone or
      telecopier.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      have not retained any dealer-manager in connection with the exchange offer
      and
      will not make any payments to brokers, dealers or other persons soliciting
      acceptances of the exchange offer. We will, however, pay the exchange agent
      reasonable and customary fees for its services and will reimburse the exchange
      agent for its reasonable out-of-pocket costs and expenses in connection
      therewith.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      also may pay brokerage houses and other custodians, nominees and fiduciaries
      the
      reasonable out-of-pocket expenses incurred by them in forwarding copies of
      this
      prospectus, letters of transmittal and related documents to the beneficial
      owners of the private notes and in handling or forwarding tenders for
      exchange.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      will pay the expenses to be incurred in connection with the exchange offer,
      including fees and expenses of the exchange agent and trustee and accounting
      and
      legal fees and printing costs.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      will pay all transfer taxes, if any, applicable to the exchange of private
      notes
      for new notes pursuant to the exchange offer. If, however, certificates
      representing new notes or private notes for principal amounts not tendered
      or
      accepted for exchange are to be delivered to, or are to be registered or issued
      in the name of, any person other than the registered holder of the private
      notes
      tendered, or if tendered private notes are registered in the name of any person
      other than the person signing the letter of transmittal, or if a transfer tax
      is
      imposed for any reason other than the exchange of private notes pursuant to
      the
      exchange offer, then the amount of any such transfer taxes, whether imposed
      on
      the registered holder or any other persons, will be payable by the tendering
      holder. If satisfactory evidence of payment of such taxes or exemption therefrom
      is not submitted with the letter of transmittal, the amount of such transfer
      taxes will be billed by us directly to such tendering holder.</div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 0pt"><strong>Consequences of
      Failure to Exchange</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Participation
      in the exchange offer is voluntary. We urge you to consult your financial and
      tax advisors in making your decisions on what action to take. Private notes
      that
      are not exchanged for new notes pursuant to the exchange offer will remain
      restricted securities. Accordingly, those private notes may be resold
      only:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">to
      a person whom the seller reasonably
      believes is a qualified institutional buyer in a transaction meeting the
      requirements of Rule 144A promulgated under the Securities Act;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">in
      a transaction meeting the requirements
      of Rule 144 promulgated under the Securities Act;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">outside
      the United States to a foreign
      person in a transaction meeting the requirements of Rule 903 or 904 of
      Regulation S promulgated under the Securities Act;</font></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">27</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: -10pt; PAGE-BREAK-BEFORE: always; LINE-HEIGHT: 10pt">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
</div>
    <div style="PADDING-LEFT: 36pt; FONT-SIZE: 8pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>

    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt; FONT-FAMILY: Times New (W1)"><font style="FONT-FAMILY: Times New (W1)">in
      accordance with another exemption from
      the registration requirements of the Securities Act and based upon an opinion
      of
      counsel if we so request;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">to
      us; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">pursuant
      to an effective registration
      statement.</font></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">In
      each case, the private notes may be resold only in accordance with any
      applicable securities laws of any state of the United States or any other
      applicable jurisdiction.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">28</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong><a name="7"></a>SELECTED
  CONSOLIDATED FINANCIAL DATA</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      following table contains (1) our selected consolidated statement of operations
      and other financial data for the fiscal years ended December&#160;31, 2006,
      2005, 2004, 2003 and 2002 and our selected consolidated balance sheet data
      &#160;at December&#160;31, 2006, 2005, 2004, 2003 and 2002, which have been
      derived from our audited consolidated financial statements not included in
      this
      prospectus and which are incorporated by reference herein and (2) our selected
      consolidated statement of operations and other financial data for the three
      months ended March&#160;31, 2007 and 2006 and our selected consolidated balance
      sheet data at March&#160;31, 2007, which have been derived from our unaudited
      consolidated financial statements not included in this prospectus and which
      are
      incorporated by reference herein. You should read the selected consolidated
      financial data of AREP in conjunction with its financial statements and the
      related notes and &#8220;Management&#8217;s Discussion and Analysis of Financial Condition
      and Results of Operations&#8221; incorporated by reference herein from our (i) Annual
      Reports on Form 10-K for the years ended December&#160;31, 2006, 2005, 2004,
      2003 and 2002 and (ii) Quarterly Report on Form 10-Q for the three months ended
      March&#160;31, 2007 (referred to herein as the 2007 three-month period). The
      selected consolidated financial data as of March&#160;31, 2007 and for the three
      months ended March&#160;31, 2007 and 2006 are unaudited. For the three months
      ended March&#160;31, 2007 and 2006, all adjustments, consisting only of normal
      and recurring adjustments, except for the adoption of SFAS No. 159 as described
      in Note 1 to our consolidated financial statements included in our Quarterly
      Report on Form 10-Q for the 2007 three-month period, which are, in our opinion,
      necessary for a fair presentation of the interim consolidated financial
      statements, have been included. Results for the 2007 three-month &#160;period
      are not necessarily indicative of the results for the full year.</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="166">
            </td>
            <td width="6">
            </td>
            <td width="4">
            </td>
            <td width="31">
            </td>
            <td width="6">
            </td>
            <td width="4">
            </td>
            <td width="29">
            </td>
            <td width="9">
            </td>
            <td width="4">
            </td>
            <td width="36">
            </td>
            <td width="6">
            </td>
            <td width="4">
            </td>
            <td width="29">
            </td>
            <td width="9">
            </td>
            <td width="4">
            </td>
            <td width="29">
            </td>
            <td width="6">
            </td>
            <td width="4">
            </td>
            <td width="29">
            </td>
            <td width="6">
            </td>
            <td width="4">
            </td>
            <td width="29">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="221">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td colspan="5" valign="bottom" width="102" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months
                Ended<br>March&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="14" valign="bottom" width="274" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Year
                Ended December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="221">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td colspan="2" valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td colspan="2" valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td colspan="2" valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td colspan="2" valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2003</strong></div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td colspan="2" valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2002</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="221">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td colspan="20" valign="bottom" width="389">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                000s, except per unit amounts and ratio)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt"><strong>Statement
                of Operations Data:</strong></div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Total
                revenues </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">351,379</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">350,147</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1,477,930</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">900,962</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="center">361,538</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">309,213</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">358,109</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Income
                (loss) from continuing operations </div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt">&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">68,717</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt">&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(9,416</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">23,069</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt">&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(22,656</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">65,176</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt">&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">42,415</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt">&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">53,046</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Total
                income (loss) from discontinued operations </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">27,861</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">59,146</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">775,764</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(3,013</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">88,578</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">26,005</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(4,320</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Earnings
                (loss) before cumulative effect of <br>accounting change </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">96,578</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">49,730</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">798,833</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(25,669</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">153,754</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">68,420</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">48,726</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Cumulative
                effect of accounting change </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1,912</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Net
                earnings (loss) </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">96,578</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">49,730</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">798,833</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(25,669</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">153,754</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">70,332</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">48,726</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Net
                earnings (loss) attributable to:</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Limited
                partners </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">94,656</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">48,741</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">782,936</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(20,292</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">130,850</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">51,074</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">63,168</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">General
                partner </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1,922</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">989</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">15,897</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(5,377</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">22,904</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">19,258</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(14,442</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Net
                earnings (loss) </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">96,578</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">49,730</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">798,833</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(25,669</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">153,754</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">70,332</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">48,726</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt"><strong>Basic
                earnings:</strong></div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Income
                (loss) from continuing operations per <br>LP Unit</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.09</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(0.15</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.40</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(0.31</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.96</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.50</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.37</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Income
                from (loss) discontinued operations<br>per LP Unit</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.44</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.94</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">12.29</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(0.05</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.88</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.55</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(0.10</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Basic
                earnings (loss) per LP Unit </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.53</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.79</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">12.69</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(0.36</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">2.84</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.05</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.27</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Weighted
                average limited partnership units outstanding </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">54,085</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">46,098</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">46,098</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">46,098</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Diluted
                earnings:</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Income
                (loss) from continuing operations </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.09</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(0.15</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.40</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(0.31</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.95</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.50</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.20</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Income
                (loss) from discontinued operations<br>per &#160;LP Unit</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.44</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.94</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">12.29</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(0.05</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.69</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.55</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(0.08</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Diluted
                earnings (loss) per LP Unit </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.53</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.79</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">12,69</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">(0.36</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">2.64</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.05</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">1.12</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Weighted
                average limited partnership units and equivalent partnership units
                outstanding </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">54,085</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">51,542</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">46,098</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">56,467</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt"><strong>Other
                financial data:</strong></div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Cash
                dividends declared (per LP Unit) </div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.15</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.10</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.40</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">0.20</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="221">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.45pt">Ratio
                of earnings to fixed charges(1)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">2.8</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">2.6</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">2.0</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 9.45pt" align="right">2.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 12pt; MARGIN: 0pt">&#160;</div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">29</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="156">
            </td>
            <td width="11">
            </td>
            <td width="4">
            </td>
            <td width="36">
            </td>
            <td width="11">
            </td>
            <td width="4">
            </td>
            <td width="36">
            </td>
            <td width="11">
            </td>
            <td width="4">
            </td>
            <td width="36">
            </td>
            <td width="11">
            </td>
            <td width="4">
            </td>
            <td width="36">
            </td>
            <td width="11">
            </td>
            <td width="4">
            </td>
            <td width="36">
            </td>
            <td width="11">
            </td>
            <td width="4">
            </td>
            <td width="36">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="208">&#160;</td>
            <td valign="top" width="15">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>As
                of<br>March 31,</strong></div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td colspan="14" valign="bottom" width="331" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>As
                of December 31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="208">&#160;</td>
            <td valign="top" width="15">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2003(1)</strong></div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2002</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="208">&#160;</td>
            <td valign="top" width="15">&#160;</td>
            <td colspan="17" valign="bottom" width="400">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                $000s)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="208">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt"><strong>Balance
                sheet data:</strong></div>
            </td>
            <td valign="top" width="15">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="top" width="15">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="top" width="15">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="top" width="15">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="top" width="15">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="top" width="15">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="208">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Cash
                and cash equivalents </div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">2,331,521</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$
                </div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">1,912,235</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">460,091</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$
                </div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">762,708</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$
                </div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">487,498</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$
                </div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">79,540</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="208">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Investments
                </div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">765,495</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">719,047</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">820,817</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">350,527
</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">167,727
</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">395,495
</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="208">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Property,
                plant and equipment, net
                &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">898,594</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">907,071</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">749,712</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">580,428</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">597,487</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">735,236
</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="208">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Total
                assets </div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">4,622,667</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">4,244,747</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">3,963,545</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">2,861,153
</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">2,156,892
</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">2,002,493
</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="208">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Long
                term debt (including current portion<br>and debt related to assets held
                for sale) </div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">1,699,118</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">1,208,960</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">1,435,821</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">759,807
</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">374,421
</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">435,675
</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="208">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Liability
                for preferred limited partnership<br>units(2) </div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">119,073</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">117,656</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">112,067</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">106,731
</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">101,649</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="208">
              <div style="MARGIN-TOP: 0.75pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt">Partners&#8217;
                equity </div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">2,347,478</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">2,310,655</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">1,495,532</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">1,641,755
</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">1,527,396
</div>
            </td>
            <td valign="top" width="15">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 0.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">1,387,253
</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 13pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">(1)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 6.65pt">Represents
      our ratio of earnings to fixed charges for the periods indicated. For purposes
      of computing the ratio of earnings to fixed charges, earnings represent earnings
      from continuing operations before income taxes, equity in earnings (loss) of
      investees and minority interest plus fixed charges. Fixed charges include
      (a)&#160;interest on indebtedness (whether expensed or capitalized),
      (b)&#160;amortization premiums, discounts and capitalized expenses related to
      indebtedness and (c)&#160;the portion of rent expense we believe to be
      representative of interest. For fiscal years 2006 and 2005, fixed charges
      exceeded earnings by $44.4 million and $15.9 million, respectively. For the
      three months ended March 31, 2006, fixed charges exceeded earnings by $19.3
      million.</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt">(2)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 2.5pt; LINE-HEIGHT: 11pt">On
      July 1, 2003, we adopted Statement of Financial Accounting Standards No. 150
      (SFAS 150), <i>Accounting for Certain Financial Instruments with Characteristics
      of both Liabilities and Equity. SFAS 150 </i>requires that a financial
      instrument, which is an unconditional obligation, be classified as a liability.
      Previous guidance required an entity to include in equity financial instruments
      that the entity could redeem in either cash or stock. Pursuant, to SFAS 150,
      our
      preferred units, which are an unconditional obligation, have been reclassified
      from &#8220;Partners equity&#8221; to a liability account in the consolidated balance
      sheets.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">30</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong><a name="8"></a>AMERICAN
  REAL ESTATE PARTNERS, L.P. AND SUBSIDIARIES<br>
  UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      following unaudited pro forma condensed combined financial statements that
      follow are presented to give effect to:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      pending acquisition of Lear for an
      aggregate cash purchase price of approximately $2.9&#160;billion, funded in part
      by approximately $1.3 billion from our cash and cash equivalents and
      investments;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      issuance of $2.6&#160;billion of notes
      to be issued to finance a portion of the Lear acquisition and finance and
      replace a portion of Lear&#8217;s existing credit facilities; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      pending sale of American Casino &amp;
Entertainment Properties LLC, or ACEP, our indirect wholly owned
      subsidiary.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      unaudited pro forma condensed combined financial statements are based on the
      historical financial statements of AREP, ACEP and Lear, as well as the
      assumptions and adjustments described below and in the accompanying notes to
      the
      unaudited pro forma condensed combined financial statements.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      unaudited pro forma condensed combined balance sheet as of March&#160;31, 2007
      is presented as if the pending acquisition of Lear and the notes to be issued
      to
      finance the Lear acquisition occurred on March&#160;31, 2007. The unaudited pro
      forma condensed combined statements of operations for the three months ended
      March&#160;31, 2007 and the fiscal year ended December&#160;31, 2006 has been
      prepared to give effect to the unaudited pro forma adjustments necessary as
      if
      the pending acquisition of Lear and the notes to be issued to finance the Lear
      acquisition had taken place on January&#160;1, 2006.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      described in Note 3 to the pro forma condensed combined financial statements,
      on
      October 16, 2006 and March 31, 2007, Lear completed the divestiture of
      substantially all of its European and North American interior businesses,
      respectively. Accordingly, the unaudited pro forma condensed combined statement
      of operations for the three months ended March 31, 2007 gives effect to the
      IAC
      North America Transaction (as defined below) as if it had occurred as of January
      1, 2007. The unaudited pro forma condensed combined statement of operations
      for
      the year ended December 31, 2006 gives effect to the IAC Europe Transaction
      (as
      defined below) and North America Transaction as if they had occurred as of
      January 1, 2006.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      unaudited pro forma condensed combined balance sheet as of March&#160;31, 2007
      is presented as if the pending sale of ACEP occurred on March&#160;31, 2007. The
      unaudited pro forma condensed combined statements of operations for the three
      months ended March&#160;31, 2007 and the years ended December&#160;31, 2006,
      2005 and 2004 has been prepared to give effect to the unaudited pro forma
      adjustments necessary as if the pending sale of ACEP had taken place on
      January&#160;1, 2004. In accordance with SEC guidelines, such historical pro
      forma statements of operations are presented for discontinued operations that
      are not yet required to be reflected in historical statements.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      preliminary allocation of the purchase price of Lear used in the unaudited
      pro
      forma condensed combined financial statements is based upon preliminary
      estimates. The estimates and assumptions, some of which cannot be made prior
      to
      completion of the Lear acquisition, are subject to change upon the acquisition
      date and finalization of the valuation of Lear&#8217;s assets and liabilities. Upon
      completion of the acquisition, AREP expects to make additional adjustments,
      and
      these valuations could change significantly from those used in the pro forma
      condensed combined financial data presented below. The final determination
      of
      the allocation of the purchase price will be based on the actual tangible and
      intangible assets of Lear that exist as of the acquisition date.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      unaudited pro forma condensed combined results do not purport to be indicative
      of the financial position and results of operations that we will obtain in
      the
      future, or that we would have obtained if the pending sale of ACEP and
      acquisition of Lear were effective as of the dates indicated above. The pro
      forma adjustments are based upon currently available information and upon
      certain assumptions that we believe are reasonable. The unaudited pro forma
      condensed combined financial statements should be read in conjunction with
      the
      historical consolidated financial statements of AREP and Lear included in their
      respective annual reports on Form 10-K and quarterly reports on Form 10-Q,
      and
      related amendments.</div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">31</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt; PAGE-BREAK-BEFORE: always" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>AMERICAN
      REAL ESTATE PARTNERS, L.P. AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>UNAUDITED
      PRO FORMA CONDENSED COMBINED BALANCE
      SHEETS<br>(amounts in 000s)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="121">
            </td>
            <td width="9">
            </td>
            <td width="4">
            </td>
            <td width="36">
            </td>
            <td width="9">
            </td>
            <td width="4">
            </td>
            <td width="42">
            </td>
            <td width="9">
            </td>
            <td width="4">
            </td>
            <td width="45">
            </td>
            <td width="12">
            </td>
            <td width="15">
            </td>
            <td width="9">
            </td>
            <td width="4">
            </td>
            <td width="42">
            </td>
            <td width="9">
            </td>
            <td width="15">
            </td>
            <td width="14">
            </td>
            <td width="9">
            </td>
            <td width="4">
            </td>
            <td width="47">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="161">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td colspan="19" valign="bottom" width="450" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31, 2007</strong></div>
            </td>
          </tr>
          <tr>
            <td rowspan="2" valign="bottom" width="161">&#160;</td>
            <td rowspan="2" valign="bottom" width="12">&#160;</td>
            <td colspan="5" valign="bottom" width="128" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Historical</strong></div>
            </td>
            <td rowspan="2" valign="bottom" width="12">&#160;</td>
            <td colspan="13" valign="bottom" width="309" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
                Forma Adjustments</strong></div>
            </td>
          </tr>
          <tr>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>AREP</strong></div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>LEAR</strong></div>
            </td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Acquisition<br>of
                Lear</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Sale
                of <br>ACEP</strong></div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td colspan="2" valign="bottom" width="68" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
                Forma<br>Results</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="161">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt" align="center"><strong>ASSETS</strong></div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Current
                assets:</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Cash
                and cash equivalents</div>
            </td>
            <td valign="bottom" width="12">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">2,331,521</div>
            </td>
            <td valign="bottom" width="12">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">330,400</div>
            </td>
            <td valign="bottom" width="12">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(1,456,491</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(4a)</div>
            </td>
            <td valign="bottom" width="12">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,004,450</div>
            </td>
            <td valign="bottom" width="12">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(5a)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">2,209,880</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Investments</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">563,552</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(3,159</div>
            </td>
            <td valign="bottom" width="12">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(5b)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">560,393</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Inventories,
                net</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">235,358</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">599,000</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">834,358</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Trade,
                notes and other receivables, net</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">169,841</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">2,412,700</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(6,348</div>
            </td>
            <td valign="bottom" width="12">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(5b)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">2,576,193</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Other
                current assets</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">124,594</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">355,900</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(18,535</div>
            </td>
            <td valign="bottom" width="12" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(5b)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">461,959</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 30pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current assets</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">3,424,866</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">3,698,000</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(1,456,491</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">976,408</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">6,642,783</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt">Property,
                plant and equipment, net</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt" align="right">898,594</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt" align="right">1,425,900</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt" align="right">(417,978</div>
            </td>
            <td valign="bottom" width="12">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt">(5b)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt" align="right">1,906,516</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Investments</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">201,943</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">183,200</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">385,143</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Goodwill</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">2,006,600</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">2,182,900</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(4b)</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">4,189,500</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Intangible
                assets</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">25,772</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">40,900</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(2,370</div>
            </td>
            <td valign="bottom" width="12">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(5b)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">64,302</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Other
                assets</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">71,492</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">306,400</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(41,631</div>
            </td>
            <td valign="bottom" width="12" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(5b)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">336,261</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 30pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Total
                assets</strong></div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">4,622,667</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">7,661,000</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="60" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">726,409</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">514,429</div>
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            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="62" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">13,524,505</div>
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          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt" align="center"><strong>LIABILITIES
                AND<br>PARTNERS&#8217; EQUITY</strong></div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Current
                liabilities:</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Accounts
                payable</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">66,497</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">2,480,300</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(6,749</div>
            </td>
            <td valign="bottom" width="12">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(5b)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">2,540,048</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Accrued
                expenses and other<br>current liabilities</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">168,744</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,181,000</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">210,981</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(5b)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,560,725</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Current
                portion of long-term debt</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">23,620</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">26,400</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(502</div>
            </td>
            <td valign="bottom" width="12" style="border-bottom: white 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(5b)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">49,518</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 30pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current liabilities</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">258,861</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">3,687,700</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">203,730</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">4,150,291</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt" align="right">1,675,498</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt" align="right">2,431,800</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt" align="right">1,481,600</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt">(4c)</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt" align="right">(257,202</div>
            </td>
            <td valign="bottom" width="12">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt">(5b)
                </div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt">(5c)</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN-TOP: 6pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 11pt" align="right">5,331,696</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Other
                non-current liabilities</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">23,738</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">820,100</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(6,144</div>
            </td>
            <td valign="bottom" width="12">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(5b)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">837,694</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Preferred
                limited partnership units</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">119,073</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">119,073</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 30pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Total
                long-term liabilities</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,818,309</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">3,251,900</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,481,600</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(263,346</div>
            </td>
            <td valign="bottom" width="12" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">6,288,463</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 30pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt"><strong>Total
                Liabilities</strong></div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">2,077,170</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">6,939,600</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,481,600</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(59,616</div>
            </td>
            <td valign="bottom" width="12" style="border-bottom: white 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">10,438,754</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Minority
                interests</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">198,019</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">28,900</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="62">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">226,919</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt"><strong>Partners&#8217;
                equity</strong></div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">2,347,478</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">692,500</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(755,191</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(4d)</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">574,045</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">(5d)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">2,858,832</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="161">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 18pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt"><strong>Total
                liabilities and partners&#8217; equity</strong></div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">4,622,667</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">7,661,000</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="60" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">726,409</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">514,429</div>
            </td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="62" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">13,524,505</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">32</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>AMERICAN
      REAL ESTATE PARTNERS, L.P. AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>UNAUDITED
      PRO FORMA CONDENSED COMBINED STATEMENTS OF
      OPERATIONS<br>(amounts in 000s except per unit amounts)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="153">
            </td>
            <td width="8">
            </td>
            <td width="4">
            </td>
            <td width="26">
            </td>
            <td width="8">
            </td>
            <td width="4">
            </td>
            <td width="37">
            </td>
            <td width="8">
            </td>
            <td width="4">
            </td>
            <td width="34">
            </td>
            <td width="8">
            </td>
            <td width="12">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="36">
            </td>
            <td width="8">
            </td>
            <td width="13">
            </td>
            <td width="4">
            </td>
            <td width="29">
            </td>
            <td width="8">
            </td>
            <td width="4">
            </td>
            <td width="37">
            </td>
            <td width="2">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="205">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td colspan="20" valign="bottom" width="404" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended March 31, 2007</strong></div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="205">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td colspan="5" valign="bottom" width="106" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Historical</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td colspan="14" valign="bottom" width="288" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
                Forma Adjustments</strong></div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="205">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td colspan="2" valign="bottom" width="40">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>AREP</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td colspan="2" valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>LEAR</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td colspan="2" valign="bottom" width="52">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Acquisition<br>of
                Lear</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Lear
                IAC<br>Transaction<br>(4f)</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="44">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Sale
                of<br>ACEP<br>(5e)</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td colspan="2" valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
                Forma<br>Results</strong></div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="205">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Revenues:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Lear
                Automotive </div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">4,406,100</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(580,500</div>
            </td>
            <td valign="bottom" width="11">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">3,825,600</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
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              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">112,888</div>
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            <td valign="bottom" width="50">
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            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
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            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(112,888</div>
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            <td valign="bottom" width="10">
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            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Real
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">27,887</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="6">&#160;</td>
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              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">27,887</div>
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              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Home
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">210,604</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">210,604</div>
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            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
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          <tr bgcolor="white">
            <td valign="bottom" width="205">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">351,379</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
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              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">4,406,100</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
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            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(580,500</div>
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            <td valign="bottom" width="11" style="border-bottom: white 0.5pt solid;">
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            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(112,888</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">4,064,091</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">Expenses:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
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          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Lear
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">4,220,700</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(579,600</div>
            </td>
            <td valign="bottom" width="11">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">3,641,100</div>
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            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Loss
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">25,600</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(25,600</div>
            </td>
            <td valign="bottom" width="11">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Gaming</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">89,661</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(89,661</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Real
                Estate</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">23,606</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">23,606</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Home
                Furnishings</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">249,619</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">249,619</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Holding
                Company Expenses</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">7,679</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">7,679</div>
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            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
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          <tr bgcolor="white">
            <td valign="bottom" width="205">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">370,565</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">4,246,300</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(605,200</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: white 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(89,661</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">3,922,004</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">Operating
                income (loss)</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">(19,186</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">159,800</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">24,700</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">(23,227</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">142,087</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">Other
                income (expense), net:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(32,977</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(51,500</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(27,743</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="17">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">(4e)</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">200</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">5,436</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(106,584</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Interest
                and other income</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">31,458</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(419</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">31,039</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Other
                income (expense), net</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">84,781</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(17,200</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">3,100</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">70,681</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Equity
                on earnings of affiliate</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1,300</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(400</div>
            </td>
            <td valign="bottom" width="11">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="top" width="17">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">(4g)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">900</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">Income
                (loss) from continuing operations before<br>income taxes and minority
                interests</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">64,076</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">92,400</div>
            </td>
            <td valign="bottom" width="10" style="border-top: #ffffff 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">(27,743</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">27,600</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">(18,210</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">138,123</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Income
                tax expense</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">(6,949</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">(32,400</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">1,600</div>
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            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">(4h)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">6,192</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">(31,557</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Minority
                interests</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">11,590</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(10,100</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(300</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1,190</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt"><strong>Income
                (loss) from continuing operations</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">68,717</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">49,900</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(27,743</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">28,900</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(12,018</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">107,756</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt"><strong>Income
                (loss) from discontinued operations</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">27,861</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">12,018</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">39,879</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt"><strong>Net
                earnings</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">96,578</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">49,900</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">(27,743</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">28,900</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt" align="right">147,635</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 5.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">Net
                earnings (loss) attributable to:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Limited
                partner </div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">94,656</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">48,907</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(27,191</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">28,325</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">144,697</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">General
                partner </div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1,922</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">993</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(552</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">575</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">2,938</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">96,578</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">49,900</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(27,743</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">28,900</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">147,635</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 4pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt">Net&#160;earnings
                per&#160;limited partnership unit:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Basic&#160;earnings:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Income
                from&#160;continuing&#160;operations</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1.09</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1.71</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Income&#160;from&#160;discontinued&#160;operations</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">0.44</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">0.63</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Basic
                earnings&#160;per&#160;LP&#160;unit</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1.53</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">2.34</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Weighted&#160;average&#160;limited
                partnership&#160;units&#160;outstanding:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Diluted&#160;earnings:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Income
                from&#160;continuing&#160;operations</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1.09</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1.70</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Income&#160;from&#160;discontinued&#160;operations</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">0.44</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">0.62</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Diluted&#160;earnings&#160;per&#160;LP&#160;unit</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1.53</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">2.32</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="205">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Weighted&#160;average&#160;LP&#160;units
                and&#160;equivalent partnership&#160;units&#160;outstanding</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="top" width="17">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">62,920</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center"><i>See accompanying notes</i></div>
    <div style="MARGIN: 0pt" align="center">33</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>AMERICAN
      REAL ESTATE PARTNERS, L.P. AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>UNAUDITED
      PRO FORMA CONDENSED COMBINED STATEMENTS OF
      OPERATIONS<br>(amounts in 000s except per unit amounts)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="158">
            </td>
            <td width="6">
            </td>
            <td width="4">
            </td>
            <td width="32">
            </td>
            <td width="8">
            </td>
            <td width="4">
            </td>
            <td width="41">
            </td>
            <td width="8">
            </td>
            <td width="4">
            </td>
            <td width="36">
            </td>
            <td width="2">
            </td>
            <td width="16">
            </td>
            <td width="4">
            </td>
            <td width="42">
            </td>
            <td width="18">
            </td>
            <td width="4">
            </td>
            <td width="28">
            </td>
            <td width="8">
            </td>
            <td width="4">
            </td>
            <td width="36">
            </td>
            <td width="2">
            </td>
          </tr>
          <tr>
            <td rowspan="3" valign="bottom" width="210">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td colspan="18" valign="bottom" width="401" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Year
                Ended December 31, 2006</strong></div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="8">&#160;</td>
            <td colspan="5" valign="bottom" width="119" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Historical</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
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              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
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                Lear</strong></div>
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            <td valign="bottom" width="21">&#160;</td>
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              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Lear
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              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
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          <tr bgcolor="#ccffcc">
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              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 5.75pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Revenues:</div>
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            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="5" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
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            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
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            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
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            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
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            <td valign="bottom" width="24">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
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            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Lear
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            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
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            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
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            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">17,838,900</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(3,067,200</div>
            </td>
            <td valign="bottom" width="24">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">14,771,700</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Gaming</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">385,699</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(385,699</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Real
                Estate</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">134,575</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">134,575</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Home
                Furnishings</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">957,656</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">957,656</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1,477,930</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">17,838,900</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(3,067,200</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: white 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(385,699</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">15,863,931</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Expenses:</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Lear
                Automotive</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">17,545,500</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(3,247,300</div>
            </td>
            <td valign="bottom" width="24">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">14,298,200</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Loss
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            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">636,000</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(636,000</div>
            </td>
            <td valign="bottom" width="24">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Gaming</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">326,984</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(326,984</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Real
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            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">106,621</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">106,621</div>
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            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Home
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            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1,108,293</div>
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            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1,108,293</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Holding
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            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">25,822</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">25,822</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">1,567,720</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">18,181,500</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(3,883,300</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: white 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(326,984</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">15,538,936</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Operating
                income (loss)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(89,790</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(342,600</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">816,100</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(58,715</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">324,995</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Other
                income (expense), net:</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(106,612</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(209,800</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(110,972</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="21">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">(4e)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">400</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">21,314</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(405,670</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Interest
                and other income</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">52,672</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(2,239</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">50,433</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Other
                income (expense), net</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">99,277</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(101,000</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">6,000</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">239</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">4,516</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Equity
                on earnings of affiliate</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">12,620</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">16,200</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(43,400</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: white 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)(4g)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
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            <td valign="bottom" width="10" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(14,580</div>
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            <td valign="bottom" width="3" style="border-bottom: white 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
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          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Loss
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                interests</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(31,833</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(637,200</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(110,972</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">779,100</div>
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            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(39,401</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(40,306</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
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          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Income
                tax expense</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(13,271</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(54,900</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(13,700</div>
            </td>
            <td valign="bottom" width="24">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)(4h)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">12,758</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(69,113</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Minority
                interests</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">68,173</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(18,300</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(1,100</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">48,773</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt"><strong>Income
                (loss) from continuing operations</strong></div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">23,069</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(710,400</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(110,972</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">764,300</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(26,643</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(60,646</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt"><strong>Income
                (loss) from discontinued operations</strong></div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">775,764</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">26,643</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">802,407</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Income
                (loss) before cumulative effect of a change in accounting
                principle</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">798,833</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(710,400</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(110,972</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">764,300</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">741,761</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Cumulative
                effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">2,900</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">2,900</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt"><strong>Net
                earnings (loss)</strong></div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">798,833</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(707,500</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(110,972</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">764,300</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">744,661</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Net
                earnings (loss) attributable to:</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Limited
                partner</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">782,936</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(693,420</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(108,764</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">749,090</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">729,842</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">General
                partner </div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">15,897</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(14,080</div>
            </td>
            <td valign="bottom" width="10">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(2,208</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">15,210</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">14,819</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">798,833</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(707,500</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(110,972</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">764,300</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">744,661</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Net
                earnings per limited partnership unit:</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Basic
                earnings:</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Income
                (loss) from continuing operations</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">0.40</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(0.93</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Income
                from discontinued operations</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">12.29</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">12.71</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Cumulative
                effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">0.05</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 29.5pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Basic
                earnings (loss) per LP unit</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">12.69</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">11.83</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Weighted
                average limited partnership units outstanding:</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Diluted
                earnings:</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Income
                (loss) from continuing operations</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">0.40</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">(0.93</div>
            </td>
            <td valign="bottom" width="3">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Income
                from discontinued operations</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">12.29</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">12.71</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 18pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Cumulative
                effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">0.05</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 29.5pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 8.65pt">Diluted
                earnings per LP unit</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">12.69</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">11.83</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="210">
              <div style="MARGIN-TOP: 1.35pt; PADDING-LEFT: 6pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 8.65pt">Weighted
                average LP units and equivalent partnership units outstanding:</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="5" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="right">61,857</div>
            </td>
            <td valign="bottom" width="3" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center"><i>See accompanying notes</i></div>
    <div style="MARGIN: 0pt" align="center">34</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>AMERICAN
      REAL ESTATE PARTNERS, L.P. AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>UNAUDITED
      PRO FORMA CONDENSED COMBINED STATEMENTS OF
      OPERATIONS<br>(amounts in 000s except per unit amounts)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="303">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="38">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="198" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Year
                Ended December 31, 2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Historical</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
                Forma<br>Adjustments</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>AREP</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Sale
                of<br>ACEP (5e)</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
                Forma<br>Results</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">327,982</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">(327,982</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">100,299</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">100,299</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Furnishings</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">472,681</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">472,681</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">900,962</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(327,982</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">572,980</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expenses:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">260,955</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">(260,955</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">82,512</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">82,512</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Furnishings</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">495,110</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">495,110</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Holding
                Company Expenses</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">12,478</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">12,478</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Acquisition
                costs</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,664</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,664</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">855,719</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(260,955</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">594,764</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                income (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">45,243</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">(67,027</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(21,784</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Other
                income (expense), net:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(91,174</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">18,846</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(72,328</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                and other income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">42,791</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">(1,617</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">41,174</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                income (expense), net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(12,861</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">(25</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(12,886</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                on earnings of affiliate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,375</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,375</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Loss
                from continuing operations before income taxes and minority
                interests</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(14,626</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(49,823</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(64,449</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                tax expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(18,170</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">16,789</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(1,381</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">10,140</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">10,140</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Loss
                from continuing operations</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(22,656</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">(33,034</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(55,690</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt"><strong>Income
                (loss) from discontinued operations</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(3,013</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">33,034</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">30,021</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt"><strong>Net
                loss</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(25,669</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(25,669)</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Net
                loss attributable to:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Limited
                partner</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(20,292</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(20,292</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">General
                partner</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(5,377</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(5,377</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(25,669</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(25,669</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Net&#160;loss
                per&#160;limited partnership unit:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic&#160;earnings:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                from&#160;continuing&#160;operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(0.31</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(0.90</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income&#160;from&#160;discontinued&#160;operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(0.05</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.54</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic
                loss per&#160;LP&#160;unit</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(0.36</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(0.36</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Weighted&#160;average&#160;limited
                partnership&#160;units&#160;outstanding:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">54,085</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">54,085</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted&#160;earnings:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                from&#160;continuing&#160;operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(0.31</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(0.90</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income&#160;(loss)&#160;from&#160;discontinued&#160;operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(0.05</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.54</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted&#160;loss&#160;per&#160;LP&#160;unit</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(0.36</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(0.36</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Weighted&#160;average&#160;LP&#160;units
                and&#160;equivalent partnership&#160;units&#160;outstanding</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">54,085</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">54,085</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center"><i>See accompanying notes</i></div>
    <div style="MARGIN: 0pt" align="center">35</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>AMERICAN
      REAL ESTATE PARTNERS, L.P. AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>UNAUDITED
      PRO FORMA CONDENSED COMBINED STATEMENTS OF
      OPERATIONS<br>(amounts in 000s except per unit amounts)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="299">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="39">
            </td>
            <td width="16">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="398">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="8" valign="bottom" width="203" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Year
                Ended December&#160;31, 2004 </strong></div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="398">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Historical</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
                Forma<br>Adjustments</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="51">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="398">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>AREP</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Sale
                of<br>ACEP (5e)</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
                Forma<br>Results</strong></div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="398">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">299,981</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(299,981</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">61,557</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">61,557</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">361,538</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(299,981</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">61,557</div>
            </td>
            <td valign="top" width="4" style="border-top: #ffffff 0.5pt solid; border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expenses:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">251,119</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(251,119</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">49,681</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">49,681</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Holding
                Company Expenses</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">4,327</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">4,327</div>
            </td>
            <td valign="top" width="4">&#160;</td>
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          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Acquisition
                costs</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">414</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">414</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">305,541</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(251,119</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">54,422</div>
            </td>
            <td valign="top" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                income (loss)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">55,997</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(48,862</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">7,135</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                income (expense), net:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(47,320</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">18,939</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(28,381</div>
            </td>
            <td valign="top" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                and other income</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">42,145</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(1,049</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">41,096</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                income (expense), net</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">24,453</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">24,453</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Income
                (Loss) from continuing operations before income taxes</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">75,275</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(30,972</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">44,303</div>
            </td>
            <td valign="top" width="4" style="border-top: #ffffff 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN: 0pt">Income tax expense</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(10,099</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">10,099</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Income
                (loss) from continuing operations</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">65,176</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(20,873</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">44,303</div>
            </td>
            <td valign="top" width="4" style="border-top: #ffffff 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt"><strong>Income
                from discontinued operations</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">88,578</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">20,873</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">109,451</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt"><strong>Net
                earnings</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">153,754</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">153,754</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                earnings attributable to:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Limited
                partner</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">130,850</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">130,850</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">General
                partner</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">22,904</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">22,904</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">153,754</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">153,754</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net&#160;earnings
                per&#160;limited partnership unit:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic&#160;earnings:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                from&#160;continuing&#160;operations</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">0.96</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">0.51</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income&#160;from&#160;discontinued&#160;operations</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.88</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.33</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic
                earnings&#160;per&#160;LP&#160;unit</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2.84</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2.84</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Weighted&#160;average&#160;limited
                partnership&#160;units&#160;outstanding:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">46,098</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">46,098</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted&#160;earnings:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                from&#160;continuing&#160;operations</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">0.95</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">0.51</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income&#160;from&#160;discontinued&#160;operations</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.69</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.33</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted&#160;earnings&#160;per&#160;LP&#160;unit</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2.64</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2.84</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Weighted&#160;average&#160;LP&#160;units
                and&#160;equivalent partnership&#160;units&#160;outstanding</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">51,542</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">46,098</div>
            </td>
            <td valign="top" width="4" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center"><i>See accompanying notes</i></div>
    <div style="MARGIN: 0pt" align="center">36</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>NOTES
      TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>1. DESCRIPTION OF
      TRANSACTIONS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Potential
      Acquisition</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      February 9, 2007, we entered into an agreement and plan of merger pursuant
      to
      which we would acquire Lear for an aggregate consideration of approximately
      $5.2
      billion, including the assumption by the surviving entity of certain outstanding
      indebtedness of Lear and the refinancing of Lear&#8217;s existing term loan and credit
      facility. In connection with the planned merger, our subsidiary, AREP Car
      Holdings Corp., entered into a commitment letter with Bank of America, N.A.,
      and
      Banc of America Securities LLC on February 8, 2007, pursuant to which Bank
      of
      America would act as the initial lender under two senior secured credit
      facilities in an aggregate principal amount of $3.6 billion, consisting of
      a
      $1.0 billion senior secured revolving facility and a $2.6 billion senior secured
      term loan B facility. The credit facilities, along with cash on hand, are
      intended to refinance and replace Lear&#8217;s existing credit facilities and to fund
      the transactions contemplated by the merger. We intend to fund approximately
      $1.3 billion of the purchase price from our cash and cash equivalents and
      investments. The transaction is conditioned upon (i)&#160;clearance under the
      Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the applicable foreign
      antitrust laws of certain other jurisdictions, (ii) approval of the merger
      and
      adoption of the merger agreement by Lear stockholders and (iii) other customary
      closing conditions. AREP expects that the transaction will close on or about
      July 1, 2007, or shortly thereafter, provided the foregoing conditions which
      have not yet been satisfied or waived are satisfied or waived. There can be
      no
      assurance that we will be able to consummate the transaction.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Pending Sale
      of
      American Casino &amp; Entertainment Properties LLC</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On April
      22, 2007, American Entertainment Properties Corp, or AEP, a wholly owned
      indirect subsidiary of AREP, entered into a Membership Interest Purchase
      Agreement with W2007/ACEP Holdings, LLC, an affiliate of Whitehall Street Real
      Estate Funds, a series of real estate investment funds affiliated with Goldman,
      Sachs &amp; Co., to sell all of the issued and outstanding membership interests
      of ACEP, which comprises our gaming operations, for $1.3 billion, plus or minus
      certain adjustments such as working capital, more fully described in the
      agreement. Pursuant to the terms of the agreement, AEP is required to cause
      ACEP
      to repay, from funds provided by AEP, the principal, interest, prepayment
      penalty or premium due on ACEP&#8217;s 7.85% senior secured notes due 2012 and ACEP&#8217;s
      senior secured credit facility. With this transaction, we anticipate realizing
      a
      gain of approximately $0.57 billion on our investments in ACEP, after income
      taxes. ACEP&#8217;s casino assets are comprised of the Stratosphere Casino Hotel &amp;
Tower, the Arizona Charlie&#8217;s Decatur, the Arizona Charlie&#8217;s Boulder and the
      Aquarius Casino Resort. The transaction is subject to the approval of the Nevada
      Gaming Commission and the Nevada State Gaming Control Board, as well as
      customary conditions. The parties expect to close the transaction in
      approximately December 2007; however, there can be no assurance that we will
      be
      able to consummate the transaction.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>2. BASIS OF
      PRESENTATION</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREP
      accounts for acquisitions under Financial Accounting Standards Board Statement
      No. 141, <i>Business Combinations</i>. In accordance with business combination
      accounting, AREP will allocate the purchase price of Lear to the tangible and
      intangible assets acquired and liabilities assumed based on their estimated
      fair
      values. AREP&#8217;s management has not yet determined the fair value of the assets
      and liabilities to be acquired as the acquisition has not yet been consummated.
      The final determination of such assumptions and estimates cannot be made until
      AREP completes the acquisition of Lear. Therefore, for purposes of the pro
      forma
      financial statements, the excess of the purchase price over the book value
      of
      Lear&#8217;s assets and liabilities has been allocated to goodwill.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>3. LEAR
      ACQUISITION</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      purchase price and purchase price allocation below are preliminary estimates
      as
      the acquisition has not been completed and the date for which the assets to
      be
      acquired and liabilities to be assumed has not been determined.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">37</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>NOTES
      TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>3. LEAR ACQUISITION
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Preliminary
      Purchase Price</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      total preliminary purchase price to be allocated is comprised of:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="302">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="403">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="60">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                000s)</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="403">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Purchase
                of outstanding common stock of Lear at $36.00 per
                share&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">2,857,991</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="403">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less:
                amount to be allocated to the general partner(1)</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(62,691</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="403">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                preliminary purchase price to be allocated</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,795,300</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #000000 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 13pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 17.1pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -17.1pt">(1)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 17.1pt; MARGIN-BOTTOM: 2.5pt">As
      of
      March 31, 2007, Icahn Partners LP, Icahn Partners Master Fund LP, Koala Holding
      Limited Partnership and High River Limited Partnership, which are affiliates
      of
      Mr. Icahn, beneficially owned approximately 16% of Lear&#8217;s outstanding common
      stock. In accordance with generally accepted accounting principles, in
      connection with the acquisition of Lear stock, the excess of cash disbursed
      over
      the historical cost of the shares beneficially owned by Mr. Icahn, which amounts
      to approximately $62.7 million, will be charged to AREP&#8217;s general partner&#8217;s
      equity. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Preliminary
      Purchase Price Allocation</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">For
      purposes of the pro forma financial statements, AREP has used Lear&#8217;s assets and
      liabilities as of March 31, 2007 as the basis for developing AREP&#8217;s fair value
      estimates.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      total preliminary purchase price will be allocated to Lear&#8217;s tangible and
      intangible assets acquired, and liabilities assumed based on their estimated
      fair values as of the acquisition date. The excess of the purchase price over
      the net tangible and identifiable intangible assets will be recorded as
      goodwill. For purposes of the accompanying pro forma financial statements,
      the
      total preliminary purchase price was allocated as follows:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="317">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="423">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="64">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                000s)</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets </div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">3,579,600</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant &amp; equipment, net </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">1,425,900</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investments</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">183,200</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                non current assets </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">347,300</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill,
                net </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">4,189,500</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(3,671,000</div>
            </td>
            <td valign="top" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(2,431,800</div>
            </td>
            <td valign="top" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                non current liabilities and minority interests</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(827,400</div>
            </td>
            <td valign="top" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                preliminary purchase price
                allocation&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,795,300</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Lear IAC
      Transaction</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">On
      October 16, 2006, Lear completed the contribution of substantially all of its
      European interior business to International Automotive Components Group, LLC
      (&#8220;IAC Europe&#8221;), its joint venture with WL Ross &amp; Co. LLC and Franklin Mutual
      Advisers, LLC, in exchange for a one-third equity interest in IAC Europe (the
      &#8220;IAC Europe Transaction&#8221;). On March&#160;31, 2007, Lear completed the transfer
      of substantially all of the assets of its North American interior business
      (as
      well as its interests in two China joint ventures) to International Automotive
      Components Group North America, Inc. (&#8220;IAC North America Transaction&#8221;). In
      addition, a wholly owned subsidiary of Lear contributed approximately $27
      million in cash to International Automotive Components Group North America,
      LLC
      (&#8220;IACNA&#8221;) in exchange for a 25% equity interest in IACNA and warrants for an
      additional 7% of the current outstanding common equity of IACNA. In connection
      with the IAC North America Transaction, International Automotive Components
      Group North America, Inc. assumed the ordinary course liabilities of Lear&#8217;s
      North American interior business, and Lear retained certain pre-closing
      liabilities, including pension and postretirement liabilities incurred through
      the closing date of the transaction.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For
      accounting purposes, Lear&#8217;s interests in IACNA and IAC Europe will be accounted
      for under the equity method of accounting. The pro forma adjustments related
      to
      Lear&#8217;s accounting for these equity investments do not </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">38</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>NOTES
      TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>3. LEAR ACQUISITION
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">reflect purchase accounting
      adjustments to be recorded by IACNA and IAC Europe and do not reflect the
      operations of other businesses acquired by IAC Europe. Consequently, the amounts
      reflected in Lear&#8217;s unaudited pro forma condensed consolidated financial
      statements are subject to change.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>4. PRO FORMA
      ADJUSTMENTS &#8211; LEAR ACQUISITION</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      following pro forma adjustments are included in the unaudited pro forma
      condensed combined balance sheet:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">4a</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 6.65pt">To
      record the following adjustments to cash:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="298">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="398">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td colspan="2" valign="top" width="64">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                000s)</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Estimated
                proceeds from borrowings </div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">2,600,000</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Estimated
                cash paid for Lear common
                stock&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(2,857,991</div>
            </td>
            <td valign="top" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Estimated
                transaction costs &#8211; Lear</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(80,100</div>
            </td>
            <td valign="top" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Estimated
                repayment of Lear debt </div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,118,400</div>
            </td>
            <td valign="top" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                adjustments to cash </div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(1,456,491</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">4b</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 6.65pt">To
      record the following adjustments to goodwill:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="302">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="403">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td colspan="2" valign="top" width="60">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                000s)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="403">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Preliminary
                fair
                value&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">4,189,500</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="403">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Historical
                amount </div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,006,600</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="403">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Increase
                </div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,182,900</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">4c</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 6.65pt">To
      record the following adjustments to long-term debt:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="303">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="404">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="64">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                000s)</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Estimated
                proceeds from
                borrowings&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">2,600,000</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Estimated
                repayment of Lear debt </div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,118,400</div>
            </td>
            <td valign="top" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Increase
                </div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,481,600</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">4d</div>
    <div style="PADDING-LEFT: 18pt; MARGIN: 0pt">To eliminate Lear&#8217;s historical
      stockholders&#8217; equity and to record $62.7 million of the purchase price of Lear
      stock allocated to the General Partner.</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">4e</div>
    <div style="PADDING-LEFT: 18pt; MARGIN: 0pt">To record additional interest
      expense associated with the net increase in debt as per Note 4c above.</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">4f</div>
    <div style="PADDING-LEFT: 18pt; MARGIN: 0pt">To eliminate the results of
      operations arising from the IAC North America Transaction and the IAC Europe
      Transaction.</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">4g</div>
    <div style="PADDING-LEFT: 18pt; MARGIN: 0pt">To reflect Lear&#8217;s estimated equity
      loss of $0.4 million and $42.1 million for the three months ended March 31,
      2007
      and the year ended December 31, 2006, respectively, related to its 25% ownership
      interest in IACNA and Lear&#8217;s estimated equity loss of $1.3 million for the year
      ended December 31, 2006 related to its one-third equity interest in IAC Europe.
      These adjustments do not reflect purchase accounting adjustments to be made
      by
      IACNA and IAC Europe and do not reflect the operations of other businesses
      acquired by IAC Europe.</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">4h</div>
    <div style="PADDING-LEFT: 18pt; MARGIN: 0pt">Primarily reflects the elimination
      of tax expense relating to the IAC North America Transaction for the three
      months ended March 31, 2007, and the elimination of tax benefits relating to
      the
      IAC North America Transaction and the IAC Europe transaction for the year ended
      December 31, 2006.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">39</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>NOTES
      TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>5. PRO FORMA
      ADJUSTMENTS &#8211; DISPOSITION OF ACEP</strong></div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">5a</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 6.65pt">To
      record the following adjustments to cash:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="299">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="398">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="60">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                000s)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Estimated
                gross proceeds from sale of ACEP </div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">1,300,000</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Add:
                net working capital </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">50,335</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                proceeds</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">1,350,335</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Repayment
                of long-term debt (including redemption
                fees)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(263,600</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">1,086,735</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Estimated
                transaction costs </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(6,757</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Stay
                bonuses </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(5,000</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">ACEP&#8217;s
                cash balance included in net working capital </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(70,528</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="398">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                adjustments to cash </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,004,450</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">5b</div>
    <div style="PADDING-LEFT: 18pt; MARGIN: 0pt">Reflects the elimination of the
      March 31, 2007 carrying value of the assets and liabilities of ACEP.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">5c</div>
    <div style="PADDING-LEFT: 18pt; MARGIN: 0pt">Reflects the payment of ACEP&#8217;s
      long-term debt by AREP of $255 million.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">5d</div>
    <div style="PADDING-LEFT: 18pt; MARGIN: 0pt">Reflects the amount of the
      estimated net gain on the transaction, net of income taxes.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">5e</div>
    <div style="PADDING-LEFT: 18pt; MARGIN: 0pt">Reflects the reversal of revenues
      and expenses included in income from continuing operations attributable to
      the
      sale of ACEP, net of income taxes.</div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt"><br></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br></div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">40</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong><a name="9"></a>DESCRIPTION
  OF NOTES</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>General</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">You
      can find the definitions of certain terms used in this description under the
      subheading &#8220;Certain Definitions.&#8221; In this description, the word &#8220;AREP&#8221; refers
      only to American Real Estate Partners, L.P., the words &#8220;AREP Finance&#8221; refer only
      to AREP Finance, the word &#8220;AREH&#8221; refers only to American Real Estate Holdings
      Limited Partnership, and the word &#8220;API&#8221; refers only to American Property
      Investors, Inc., and, in each case, not to any of their respective Subsidiaries.
      In addition, the word &#8220;notes&#8221; refers to the notes issued on January&#160;17,
      2007 together with the Existing Notes. For the avoidance of doubt, AREH will
      be
      deemed to be a Subsidiary of AREP for so long as AREH remains a Guarantor.
      The
      term &#8220;Issuers&#8221; refers to AREP and AREP Finance, collectively. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Issuers issued the private notes, and will issue the new notes, under the
      indenture dated February&#160;7, 2005 among the Issuers, AREH, as guarantor, and
      Wilmington Trust Company, as trustee. The terms of the notes include those
      stated in the indenture and those made part of the indenture by reference to
      the
      Trust Indenture Act of 1939. The notes issued on January&#160;17, 2007 were
      additional notes issued under the indenture described above. On February&#160;1,
      2005, the Issuers issued and sold $480.0&#160;million of the Existing Notes. The
      notes issued on January&#160;17, 2007 are pari passu with, of the same series
      as, and vote on any matter submitted to the noteholders with, the Existing
      Notes. Subsequent to the consummation of the exchange offer, the publicly
      registered exchange notes will be identical to, and will trade as a single
      class
      with, the Existing Notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      following description is a summary of the material provisions of the indenture.
      It does not restate the indenture in entirety. We urge you to read the indenture
      because it and not this description, defines your rights as holders of the
      notes. Copies of the indenture are available as set forth below under &#8220;&#8212;
Additional Information.&#8221; Certain defined terms used in this description but not
      defined below under &#8220;&#8212; Certain Definitions&#8221; have the meanings assigned to them
      in the indenture and the registration rights agreement.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      avoidance of doubt, the inclusion of exceptions to the provisions (including
      covenants and definitions) set forth herein will not be interpreted to imply
      that the matters permitted by the exception would be limited by the terms of
      such provisions but for such exceptions.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      registered holder of a note will be treated as the owner of it for all purposes.
      Only registered holders will have rights under the indenture.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Brief Description
      of
      the Notes and the Note Guarantee</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>The
      Notes</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The notes
      are:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      general unsecured obligation of each of
      the Issuers;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">pari
      passu in right of payment to all
      existing and future senior Indebtedness of each of the Issuers;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">senior
      in right of payment to any future
      subordinated Indebtedness of each of the Issuers; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">effectively
      subordinated to the secured
      Indebtedness of the Issuers to the extent of the value of the collateral
      securing such Indebtedness. As of March&#160;31, 2007, the Issuers did not have
      any secured Indebtedness.</font></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>The Note
      Guarantee</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Guarantee of the notes is:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      general unsecured obligation of
      AREH;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">pari
      passu in right of payment to all
      existing and future senior Indebtedness of AREH;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">senior
      in right of payment to any future
      subordinated Indebtedness of AREH; and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">effectively
      subordinated to the secured
      Indebtedness of AREH to the extent of the value of the collateral securing
      such
      Indebtedness. As of March&#160;31, 2007, AREH had $108.0 million of secured
      Indebtedness.</font></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">41</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
</div>
 <div style="TEXT-INDENT: 18pt">The
      operations of AREP are conducted through its Subsidiaries (including AREH)
      and,
      therefore, AREP depends on the cash flow of AREP&#8217;s Subsidiaries and AREH to meet
      its obligations, including its obligations under the notes. The notes will
      not
      be guaranteed by any of AREP&#8217;s Subsidiaries other than AREH. The notes and the
      guarantee will be effectively subordinated in right of payment to all
      Indebtedness and other liabilities and commitments (including trade payables
      and
      lease obligations) of AREP&#8217;s Subsidiaries (other than AREH). Any right of the
      Issuers or AREH to receive assets of any of their Subsidiaries (other than
      AREH)
      upon that Subsidiary&#8217;s liquidation or reorganization (and the consequent right
      of the holders of the notes to participate in those assets) will be effectively
      subordinated to the claims of that Subsidiary&#8217;s creditors, except to the extent
      that any of the Issuers or AREH is itself recognized as a creditor of that
      Subsidiary, in which case the claims of the Issuers and AREH would still be
      subordinate in right of payment to any security in the assets of the Subsidiary
      and any Indebtedness of the Subsidiary senior to that held by the Issuers or
      AREH. The covenants of the notes do not restrict the ability of AREP&#8217;s
      Subsidiaries, other than AREH, from incurring additional Indebtedness or
      creating liens, nor do the covenants of the notes restrict the ability of AREH,
      AREP or its Subsidiaries from making investments or entering into sale and
      leaseback transactions. See &#8220;Risk Factors &#59450; The notes will be effectively
      subordinated to any secured indebtedness, and the indebtedness and liabilities
      of our subsidiaries other than AREH&#8221; and &#8220;Risk Factors &#59450; Our subsidiaries, other
      than AREH, will not be subject to any of the covenants in the indenture for
      the
      notes and only AREH will guarantee the notes. We may not be able to rely on
      the
      cash flow or assets of our subsidiaries to pay our indebtedness.&#8221;</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Principal, Maturity
      and Interest</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Issuers issued $500.0&#160;million in aggregate principal amount of private
      notes and will issue $500.0&#160;million in aggregate principal amount of new
      notes. The Issuers may issue additional notes (&#8220;Additional Notes&#8221;) from time to
      time. Any offering of Additional Notes is subject to the covenant &#8220;&#8212; Certain
      Covenants &#8212; Incurrence of Indebtedness and Issuance of Preferred Stock.&#8221; In the
      case of each series, the notes and any Additional Notes subsequently issued
      under the indenture will be treated as a single class for all purposes under
      the
      indenture, including, without limitation, waivers, amendments, redemption and
      offers to purchase. The Issuers will issue notes in denominations of $1,000
      and
      integral multiples of $1,000. The notes will mature on February&#160;15,
      2013.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Interest
      on the notes will accrue at the rate of 7 1/8% per annum and is payable
      semi-annually in arrears on February&#160;15 and August&#160;15, commencing on
      February&#160;15, 2007. Interest on overdue principal and interest and
      Liquidated Damages, if any, will accrue at a rate that is 1% higher than the
      then applicable interest rate on the notes. The Issuers will make each interest
      payment to the holders of record on the immediately preceding February&#160;1
      and August&#160;1.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Interest
      on the notes will accrue from the date of original issuance or, if interest
      has
      already been paid, from the date it was most recently paid. Interest will be
      computed on the basis of a 360-day year comprised of twelve 30-day months.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Methods of Receiving
      Payments on the Notes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If a
      noteholder holds at least $2.0&#160;million aggregate principal amount of notes,
      such holder may give wire transfer instructions to AREP and the Issuers will
      instruct the trustee to pay all principal, interest and premium and Liquidated
      Damages, if any, on that holder&#8217;s notes in accordance with those instructions.
      All other payments on the notes will be made at the office or agency of the
      paying agent and registrar within the City and State of New York unless the
      Issuers elect to make interest payments by check mailed to the noteholders
      at
      their address set forth in the register of holders. In addition, all payments
      will be subject to the applicable rules and procedures of the settlement systems
      (including, if applicable, those of Euroclear and Clearstream), which may change
      from time to time.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Paying Agent and
      Registrar for the Notes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      trustee will initially act as paying agent and registrar. The Issuers may change
      the paying agent or registrar without prior notice to the holders of the notes,
      and the Issuers or any of their Subsidiaries (including AREH) may act as paying
      agent or registrar.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">42</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong>Transfer
      and Exchange</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">A holder
      may transfer or exchange notes in accordance with the provisions of the
      indenture. The registrar and the trustee may require a holder, among other
      things, to furnish appropriate endorsements and transfer documents in connection
      with a transfer of notes. Holders will be required to pay all taxes due on
      transfer. The Issuers will not be required to transfer or exchange any note
      selected for redemption. Also, the Issuers will not be required to transfer
      or
      exchange any note for a period of 15 days before a selection of notes to be
      redeemed.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note
      Guarantee</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The notes
      will be guaranteed by AREH. AREP may, at its option, add subsidiary Guarantors
      to the notes. Each Guarantor&#8217;s obligations under its Note Guarantee will be
      limited as necessary to prevent the Note Guarantee from constituting a
      fraudulent conveyance under applicable law. See &#8220;Risk Factors &#8212; Federal and
      state statutes allow courts, under specific circumstances, to void guarantees
      and require noteholders to return payments received from the guarantor.&#8221;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Any
      Guarantor&#8217;s Note Guarantee will be released:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      upon the substitution of a successor to AREH or other release as described
      under
      the heading &#8220;Certain Covenants &#8212; Merger, Consolidation or Sale of Assets&#8221;;
      and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      upon legal defeasance or satisfaction and discharge of the indenture as provided
      below under the captions &#8220;&#8212; Covenant Defeasance&#8221; and &#8220;&#8212; Satisfaction and
      Discharge.&#8221;</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Optional
      Redemption</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">At any
      time prior to February&#160;15, 2008, the Issuers may on one or more occasions
      redeem up to 35% of the aggregate principal amount of notes (including
      Additional Notes) issued under the indenture at a redemption price of 107 1/8%
      of the principal amount thereof, plus accrued and unpaid interest and Liquidated
      Damages, if any, to the redemption date, with the net cash proceeds of one
      or
      more Equity Offerings; provided, however, that:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      at least 65% of the aggregate principal amount of notes issued under the
      indenture remains outstanding immediately after the occurrence of such
      redemption (excluding notes held by AREP and its Subsidiaries (including any
      Guarantor)); and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the redemption occurs within 60 days of the date of the closing of such Equity
      Offering.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Except
      pursuant to the preceding paragraph, the notes will not be redeemable at the
      Issuers&#8217; option prior to February&#160;15, 2009.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">On
      or
      after February&#160;15, 2009, the Issuers may redeem all or a part of the notes
      upon not less than 15 nor more than 60 days&#8217; notice, at the redemption prices
      (expressed as percentages of principal amount) set forth below plus accrued
      and
      unpaid interest and Liquidated Damages, if any, on the notes redeemed, to the
      applicable redemption date, if redeemed during the twelve-month period beginning
      on one of the years indicated below:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="108">
            </td>
            <td width="13">
            </td>
            <td width="52">
            </td>
            <td width="11">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="144" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt"><strong>Year</strong></div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="70" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Percentage</strong></div>
            </td>
            <td valign="top" width="15">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="144">&#160;</td>
            <td valign="top" width="18">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="70">&#160;</td>
            <td valign="top" width="15">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="144">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2009</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="70">
              <div style="MARGIN: 0pt" align="right">103.563</div>
            </td>
            <td valign="top" width="15">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="144">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2010</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="70">
              <div style="MARGIN: 0pt" align="right">101.781</div>
            </td>
            <td valign="top" width="15">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="144">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2011
                and thereafter</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="70">
              <div style="MARGIN: 0pt" align="right">100.000</div>
            </td>
            <td valign="top" width="15">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Mandatory Disposition
      Pursuant to Gaming Laws</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If any
      Gaming Authority requires that a holder or Beneficial Owner of notes be
      licensed, qualified or found suitable under any applicable Gaming Law and such
      holder or Beneficial Owner:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      fails to apply for a license, qualification or a finding of suitability within
      30 days (or such shorter period as may be required by the applicable Gaming
      Authority) after being requested to do so by the Gaming Authority; or</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">43</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
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</div>
<div style="PADDING-LEFT: 18pt; TEXT-INDENT: 18pt">(2)
      is denied such license or qualification or not found suitable; AREP shall then
      have the right, at its option:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(a)
      to require each such holder or Beneficial Owner to dispose of its notes within
      30 days (or such earlier date as may be required by the applicable Gaming
      Authority) of the occurrence of the event described in clause (1) or (2) above,
      or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(b)
      to redeem the notes of each such holder or Beneficial Owner, in accordance
      with
      Rule 14e-1 of the Exchange Act, if applicable, at a redemption price equal
      to
      the lowest of:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(i)
      the principal amount thereof, together with accrued and unpaid interest and
      Liquidated Damages, if any, to the earlier of the date of redemption, the date
      30 days after such holder or Beneficial Owner is required to apply for a
      license, qualification or finding of suitability (or such shorter period that
      may be required by any applicable Gaming Authority) if such holder or Beneficial
      Owner fails to do so (&#8220;Application Date&#8221;) or of the date of denial of license or
      qualification or of the finding of unsuitability by such Gaming Authority;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(ii)
      the price at which such holder or Beneficial Owner acquired the notes, together
      with accrued and unpaid interest and Liquidated Damages, if any, to the earlier
      of the date of redemption, the Application Date or the date of the denial of
      license or qualification or of the finding of unsuitability by such Gaming
      Authority; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(iii)
      such other lesser amount as may be required by any Gaming Authority.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Immediately
      upon a determination by a Gaming Authority that a holder or Beneficial Owner
      of
      the notes will not be licensed, qualified or found suitable and must dispose
      of
      the notes, the holder or Beneficial Owner will, to the extent required by
      applicable Gaming Laws, have no further right:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      to exercise, directly or indirectly, through any trustee or nominee or any
      other
      person or entity, any right conferred by the notes, the Note Guarantee or the
      indenture; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      to receive any interest, Liquidated Damages, dividend, economic interests or
      any
      other distributions or payments with respect to the notes and the Note Guarantee
      or any remuneration in any form with respect to the notes and the Note Guarantee
      from the Issuers, any Note Guarantor or the trustee, except the redemption
      price
      referred to above.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREP
      shall notify the trustee in writing of any such redemption as soon as
      practicable. Any holder or Beneficial Owner that is required to apply for a
      license, qualification or a finding of suitability will be responsible for
      all
      fees and costs of applying for and obtaining the license, qualification or
      finding of suitability and of any investigation by the applicable Gaming
      Authorities and the Issuers and any Note Guarantor will not reimburse any holder
      or Beneficial Owner for such expense.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Mandatory
      Redemption</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Issuers are not required to make mandatory redemption or sinking fund payments
      with respect to the notes.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Repurchase at the
      Option of Holders</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Change of
      Control</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If a
      Change of Control occurs, each holder of notes will have the right to require
      the Issuers to repurchase all or any part (equal to $1,000 or an integral
      multiple of $1,000) of that holder&#8217;s notes pursuant to a Change of Control offer
      on the terms set forth in the indenture. In the Change of Control offer, the
      Issuers will offer a Change of Control payment in cash equal to 101% of the
      aggregate principal amount of notes repurchased plus accrued and unpaid interest
      and Liquidated Damages, if any, on the notes repurchased, to the date of
      purchase. Within 30 days following any Change of Control, the Issuers will
      mail
      a notice to each holder describing the transaction or transactions that
      constitute the Change of Control and offering to repurchase notes on the Change
      of Control payment date specified in the notice, which date will be no earlier
      than 30 days and no later than 60 days from the date such notice is mailed,
      pursuant to the procedures required by the indenture and described in such
      notice.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">44</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
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</div>
<div style="PADDING-LEFT: 18pt; TEXT-INDENT: 18pt">On
      the Change of Control payment date, the Issuers will, to the extent
      lawful:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      accept for payment all notes or portions of notes properly tendered and not
      withdrawn pursuant to the Change of Control offer;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      deposit with the paying agent an amount equal to the Change of Control payment
      in respect of all notes or portions of notes properly tendered; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      deliver or cause to be delivered to the trustee the notes properly accepted
      together with an Officers&#8217; Certificate stating the aggregate principal amount of
      notes or portions of notes being purchased by the Issuers.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      paying agent will promptly mail to each holder of notes properly tendered the
      Change of Control payment for such notes, and the trustee will promptly
      authenticate and mail (or cause to be transferred by book entry) to each holder
      a new note equal in principal amount to any unpurchased portion of the notes
      surrendered, if any; provided that each new note will be in a principal amount
      of $1,000 or an integral multiple of $1,000. The Issuers will publicly announce
      the results of the Change of Control offer on or as soon as practicable after
      the Change of Control payment date.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      provisions described above that require the Issuers to make a Change of Control
      offer following a Change of Control will be applicable whether or not any other
      provisions of the indenture are applicable. Except as described above with
      respect to a Change of Control, the indenture does not contain provisions that
      permit the holders of the notes to require that the Issuers repurchase or redeem
      the notes in the event of a takeover, recapitalization or similar
      transaction.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Issuers will not be required to make a Change of Control offer upon a Change
      of
      Control if a third party makes the Change of Control offer in the manner, at
      the
      times and otherwise in compliance with the requirements set forth in the
      indenture applicable to a Change of Control offer made by the Issuers and
      purchases all notes properly tendered and not withdrawn under the Change of
      Control offer.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      definition of Change of Control includes a phrase relating to the sale, lease,
      transfer, conveyance or other disposition by AREP or AREH of &#8220;all or
      substantially all&#8221; of its properties or assets. Although there is a limited body
      of case law interpreting the phrase &#8220;substantially all,&#8221; there is no precise
      established definition of the phrase under applicable law. Accordingly, the
      ability of a holder of notes to require the Issuers to repurchase its notes
      as a
      result of a sale, lease, transfer, conveyance or other disposition of less
      than
      all of the assets of AREP or AREH to another Person or group may be uncertain.
      In addition, under certain circumstances the definition of Change of Control
      excludes certain sales, leases transfers, conveyances or other dispositions
      even
      if they constitute &#8220;all or substantially all&#8221; of the properties or assets of
      AREP or AREH.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Certain
      Covenants</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Restricted
      Payments</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREP
      will
      not, and will not permit any of its Subsidiaries (including any Guarantor)
      to:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      declare or pay any dividend or make any other distribution on account of AREP&#8217;s
      or any of its Subsidiaries&#8217; (including any Guarantor&#8217;s) Equity Interests or to
      the holders of AREP&#8217;s or any of its Subsidiaries&#8217; (including AREH&#8217;s) Equity
      Interests in their capacity as such (other than dividends or distributions
      payable in Equity Interests (other than Disqualified Stock) of AREP or to AREP
      or a Subsidiary of&#160;AREP (including AREH));</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      purchase, redeem or otherwise acquire or retire for value (including, without
      limitation, in connection with any merger or consolidation involving AREP)
      any
      Equity Interests of AREP; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      make any payment on or with respect to, or purchase, redeem, defease or
      otherwise acquire or retire for value any Indebtedness of AREP or any Guarantor
      that is contractually subordinated to the notes or to any Note Guarantee
      (excluding any intercompany Indebtedness between or among AREP and any of its
      Subsidiaries (including any Guarantor)), except a payment of interest, Other
      Liquidated Damages or principal at the Stated Maturity on such subordinated
      Indebtedness (all such payments and other actions set forth in these clauses
      (1)&#160;through (3) (except as excluded therein) above being collectively
      referred to as &#8220;Restricted Payments&#8221;),</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">45</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
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 </div>
    <div style="PADDING-LEFT: 18pt">
unless,
      at the time of and after giving effect to such Restricted Payment:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      no Default or Event of Default has occurred and is continuing or would occur
      as
      a consequence of such Restricted Payment;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      AREP or any Guarantor would, at the time of such Restricted Payment and after
      giving pro forma effect thereto as if such Restricted Payment had been made
      at
      the beginning of the most recently ended four-quarter period for which financial
      statements are available, have been permitted to incur at least $1.00 of
      additional Indebtedness pursuant to the first paragraph of the covenant
      described below under the caption <br>&#8220;&#8212; Incurrence of Indebtedness and Issuance
      of Preferred Stock&#8221;; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      such Restricted Payment, together with the aggregate amount of all other
      Restricted Payments made by&#160;AREP and its Subsidiaries (including any
      Guarantor) after May&#160;12, 2004 (excluding Restricted Payments permitted by
      clauses (2), (3), (4), (6) and (8) of the next succeeding paragraph) is less
      than the sum, without duplication, of:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(a)
      50% of the Consolidated Net Income of AREP for the period (taken as one
      accounting period) from July&#160;1, 2006 to the end of AREP&#8217;s most recently
      ended fiscal quarter for which financial statements are available at the time
      of
      such Restricted Payment (or, if such Consolidated Net Income for such period
      is
      a&#160;deficit, less 100% of such deficit); provided, however, that to the
      extent any payments of Tax Amounts were not deducted in the calculation of
      Consolidated Net Income during the applicable period, for purposes of this
      clause (a), such payments of Tax Amounts will be deducted from Consolidated
      Net
      Income, plus</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(b)
      100% of the aggregate net cash proceeds received by AREP since May&#160;12, 2004
      as a contribution to its equity capital or from the issue or sale of Equity
      Interests of AREP (excluding Disqualified Stock) or&#160;from the issue or sale
      of convertible or exchangeable Disqualified Stock or convertible or exchangeable
      debt securities of AREP that have been converted into or exchanged for such
      Equity Interests (other than Equity Interests or Disqualified Stock or debt
      securities sold to a Subsidiary of AREP (including AREH)).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">So long
      as no Default or Event of Default has occurred and is continuing or would be
      caused thereby (except with respect to clauses (6) and (8), which payments
      will
      be permitted notwithstanding an Event of Default), the preceding provisions
      will
      not prohibit:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      the payment of any dividend or the consummation of any irrevocable redemption
      or
      payment within 60&#160;days after the date of declaration of the dividend or
      giving of the redemption notice or becoming irrevocably obligated to make such
      payment, as the case may be, if at the date of declaration or notice or becoming
      irrevocably obligated to make such payment, the dividend or payment would have
      complied with the provisions of the indenture;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the making of any Restricted Payment in exchange for, or out of the net cash
      proceeds of the substantially concurrent sale (other than to a Subsidiary of
      AREP (including any Guarantor)) of, Equity Interests (other than Disqualified
      Stock) or from the substantially concurrent contribution of equity capital
      to&#160;AREP; provided, however, that the amount of any such net cash proceeds
      that are utilized for any such redemption, repurchase, retirement, defeasance
      or
      other acquisition will be excluded from clause (3)(b) of the preceding
      paragraph;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      the repurchase, redemption, defeasance or other acquisition or retirement for
      value of Indebtedness of&#160;AREP or any Guarantor that is contractually
      subordinated to the notes with the net cash proceeds from a substantially
      concurrent incurrence of Permitted Refinancing Indebtedness;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      the declaration or payment of any dividend or distribution by a Subsidiary
      of
      AREP (including any Guarantor) to the holders of its Equity Interests; provided,
      that if any such dividend or distribution is paid to an Affiliate of the
      Principal (other than AREP or any of its Subsidiaries (including any
      Guarantor)), that any such dividend or distribution is paid on a pro rata basis
      to all holders (including AREP or any of its Subsidiaries (including any
      Guarantor)) that hold securities whose terms (either contractually or by law)
      entitle them to the same distribution upon which such dividend or distribution
      is paid;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      the repurchase, redemption or other acquisition or retirement for value of
      any
      Equity Interests of AREP or any Subsidiary of AREP (including any Guarantor)
      held by any member of AREP&#8217;s (or any of its Subsidiaries&#8217; (including any
      Guarantors)) management pursuant to any management equity subscription </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">46</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
     <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
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 </div>
    <div style="PADDING-LEFT: 18pt">
agreement,
      stock option agreement or similar agreement; provided that the aggregate price
      paid for all such repurchased, redeemed, acquired or retired Equity Interests
      shall not exceed $2.0&#160;million;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(6)
      for so long as AREP is a partnership or otherwise a pass-through entity for
      federal income tax purposes for any period, AREP may make cash distributions
      to
      its equity holders or partners in an amount not to exceed the Tax Amount for
      such period; provided that a distribution of the Tax Amount shall be made no
      earlier than 20 days prior to the due date for such tax (or the date that
      quarterly estimated taxes are required to be paid) that would be payable by
      AREP
      if it were a Delaware corporation;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(7)
      the purchase, redemption or retirement for value of Capital Stock of AREP not
      owned by the Principal or any Affiliate of the Principal, provided that (a)
      AREP
      would, at the time of such Restricted Payment and after giving pro forma effect
      thereto as if such Restricted Payment had been made at the beginning of the
      most
      recently ended four-quarter period for which financial statements are available,
      have been permitted to incur at least $1.00 of additional Indebtedness pursuant
      to the first paragraph of the covenant described below under the caption &#8220;&#8212;
Incurrence of Indebtedness and Issuance of Preferred Stock&#8221; and (b) after giving
      effect to such purchase, redemption or retirement, the Partners&#8217; Equity is at
      least $1.0&#160;billion;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(8)
      the payment of dividends on the Preferred Units in the form of additional
      Preferred Units or other Capital Stock of AREP (that is not Disqualified Stock)
      or the payment of cash dividends on the Preferred Units in lieu of fractional
      Preferred Units; provided that the aggregate amount of cash under this clause
      (8) does not exceed $100,000 in any calendar year;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(9)
      the purchase, redemption or retirement for value of the Preferred Units on
      or
      before March&#160;31, 2010, provided that (a) AREP would, at the time of such
      Restricted Payment and after giving pro forma effect thereto as if such
      Restricted Payment had been made at the beginning of the most recently ended
      four-quarter period for which financial statements are available, have been
      permitted to incur at least $1.00 of additional Indebtedness pursuant to the
      first paragraph of the covenant described below under the caption &#8220;&#8212; Incurrence
      of Indebtedness and Issuance of Preferred Stock&#8221; and (b) after giving effect to
      such purchase, redemption or retirement, the Partners&#8217; Equity is at least
      $1.0&#160;billion; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(10)
      other Restricted Payments in an aggregate amount not to exceed
      $50.0&#160;million since the date of the indenture.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For
      purposes of determining compliance with this covenant, in the event that a
      proposed Restricted Payment meets the criteria of more than one of the
      categories of Restricted Payments described in clauses (1) through (10) above,
      or is permitted to be made pursuant to the first paragraph of this covenant,
      AREP shall, in its sole discretion, classify (or later reclassify, in whole
      or
      in part, in its sole discretion) such Restricted Payment in any manner that
      complies with this covenant.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      amount of all Restricted Payments (other than cash) will be the Fair Market
      Value on the date of the Restricted Payment of the assets, property or
      securities proposed to be transferred or issued by AREP or such Subsidiary
      (including AREH), as the case may be, pursuant to the Restricted Payment.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Incurrence of
      Indebtedness and Issuance of Preferred Stock</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Neither
      AREP nor any Guarantor will create, incur, issue, assume, guarantee or otherwise
      become liable, contingently or otherwise, with respect to (collectively,
&#8220;incur&#8221;) any Indebtedness (including Acquired Debt), and neither AREP nor any
      Guarantor will issue any Disqualified Stock; provided, however, that AREP or
      any
      Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified
      Stock, if immediately after giving effect to the incurrence of additional
      Indebtedness (including Acquired Debt) or issuance of Disqualified Stock
      (including a pro forma application of the net proceeds therefrom), the ratio
      of
      the aggregate principal amount of all outstanding Indebtedness (excluding
      Indebtedness incurred pursuant to clauses (4), (7) and (8) of the following
      paragraph and any Hedging Obligations of AREP&#8217;s Subsidiaries that are not
      Guarantors) of AREP and its Subsidiaries (including any Guarantor) on a
      consolidated basis determined in accordance with GAAP (including an amount
      of
      Indebtedness equal to the principal amount of any Guarantees by AREP or its
      Subsidiaries (including any Guarantor) of any Indebtedness of a Person (that
      is
      not AREP or a Subsidiary) to the extent such Guarantees were not included in
      computing AREP&#8217;s or its Subsidiaries&#8217; (including any Guarantor&#8217;s) outstanding
      Indebtedness) to the Tangible Net Worth of AREP and its Subsidiaries (including
      any Guarantor) on a consolidated basis, would have been less than 1.75 to
      1.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">47</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>
 <div style="TEXT-INDENT: 18pt">The
      preceding paragraph of this covenant will not prohibit the incurrence of any
      of
      the following items of Indebtedness (collectively, &#8220;Permitted Debt&#8221;):</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      the incurrence by AREP or any Guarantor of Indebtedness represented by the
      notes
      to be issued on the date of the indenture and the exchange notes to be issued
      pursuant to the registration rights agreement;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the incurrence by AREP or any Guarantor of Permitted Refinancing Indebtedness
      in
      exchange for, or the net proceeds of which are used to refund, refinance or
      replace Indebtedness (other than intercompany Indebtedness) that was incurred
      under the first paragraph of this covenant or clauses (1), (2) or (9) of this
      paragraph or any Existing Indebtedness;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      the incurrence by AREP or any Guarantor of intercompany Indebtedness between
      or
      among AREP and any of its Subsidiaries (including AREH) or the issuance of
      Disqualified Stock by any Guarantor to AREP;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      the incurrence by AREP or any Guarantor of Hedging Obligations that are incurred
      in the normal course of business;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      the incurrence by AREP or any Guarantor of Indebtedness arising from the
      honoring by a bank or other financial institution of a check, draft or similar
      instrument inadvertently drawn against insufficient funds, so long as such
      Indebtedness is covered within five business days;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(6)
      the incurrence by AREP or any Guarantor of the Existing Indebtedness;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(7)
      Indebtedness arising from any agreement entered into by AREP or AREH providing
      for indemnification, purchase price adjustment or similar obligations, in each
      case, incurred or assumed in connection with an asset sale;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(8)
      Indebtedness of AREP or any Guarantor attributable to Bad Boy Guarantees;
      and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(9)
      the incurrence by AREP or any Guarantor of additional Indebtedness in an
      aggregate principal amount at any time outstanding, including all Permitted
      Refinancing Indebtedness incurred to refund, refinance or replace any
      Indebtedness incurred pursuant to this clause (9), not to exceed
      $10.0&#160;million at any one time outstanding.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Neither
      AREP nor any Guarantor will incur any Indebtedness (including Permitted Debt)
      that is contractually subordinated in right of payment to any other Indebtedness
      of AREP or any Guarantor unless such Indebtedness is also contractually
      subordinated in right of payment to the notes and the Note Guarantee, as
      applicable, on substantially identical terms; provided, however, that no
      Indebtedness of AREP or any Guarantor shall be deemed to be contractually
      subordinated in right of payment to any other Indebtedness of AREP or any
      Guarantor for purposes of this paragraph solely by virtue of being unsecured
      or
      secured to a lesser extent or on a junior Lien basis.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">To the
      extent AREP or any Guarantor incurs any intercompany Indebtedness, (a) if AREP
      or any Guarantor is the obligor on such Indebtedness, such Indebtedness (other
      than intercompany Indebtedness of any Guarantor to or from AREP or another
      Guarantor) must be expressly subordinated to the prior payment in full in cash
      of all Obligations with respect to the notes and (b)(i) any subsequent issuance
      or transfer of Equity Interests that results in any such Indebtedness being
      held
      by a Person other than AREP or a Subsidiary of AREP (including any Guarantor)
      and (ii) any sale or other transfer of any such Indebtedness to a Person that
      is
      not either AREP or a Subsidiary of AREP (including any Guarantor) shall be
      deemed, in each case, to constitute an incurrence of such Indebtedness by AREP
      or any Guarantor, that is not intercompany Indebtedness; provided that in the
      case of clause (a), that no restriction on the payment of principal, interest
      or
      other obligations in connection with such intercompany Indebtedness shall be
      required by such subordinated terms except during the occurrence and
      continuation of a Default or Event of Default.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For
      purposes of determining compliance with this covenant, in the event that an
      item
      of Indebtedness meets the criteria of more than one of the categories of
      Permitted Debt described in clauses (1) through (9) above or is entitled to
      be
      incurred pursuant to the first paragraph of this covenant, in each case, as
      of
      the date of incurrence thereof, AREP shall, in its sole discretion, classify
      (or
      later reclassify in whole or in part, in its sole discretion) such item of
      Indebtedness in any manner that complies with this covenant and such
      Indebtedness will be treated as having been incurred pursuant to such clauses
      or
      the first paragraph hereof, as the case may be, designated by AREP.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">48</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>
 <div style="TEXT-INDENT: 18pt">The
      accrual of interest, the accretion or amortization of original issue discount,
      the payment of interest or Other Liquidated Damages on any Indebtedness in
      the
      form of additional Indebtedness with the same terms, the reclassification of
      preferred stock as Indebtedness due to a change in accounting principles, and
      the payment of dividends on Disqualified Stock in the form of additional shares
      of the same class of Disqualified Stock will not be deemed to be an incurrence
      of Indebtedness or an issuance of Disqualified Stock for purposes of this
      covenant. Notwithstanding any other provision of this covenant, the maximum
      amount of Indebtedness that AREP or any Guarantor may incur pursuant to this
      covenant shall not be deemed to be exceeded solely as a result of fluctuations
      in exchange rates or currency values.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      amount of any Indebtedness outstanding as of any date will be:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      the accreted value of the Indebtedness, in the case of any Indebtedness issued
      with original issue discount;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the principal amount of the Indebtedness, in the case of any other Indebtedness;
      and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      in respect of Indebtedness of another Person secured by a Lien on the assets
      of
      the specified Person, the lesser of:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(a)
      the Fair Market Value of such assets at the date of determination; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(b)
      the amount of the Indebtedness of the other Person.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Limitation on
      Liens</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Neither
      AREP nor any Guarantor will, (a) issue, assume or guarantee any Indebtedness
      if
      such Indebtedness is secured by a Lien upon, or (b) secure any then outstanding
      Indebtedness by granting a Lien upon, any Principal Property of AREP or any
      Guarantor, now owned or hereafter acquired by AREP or any Guarantor, without
      effectively providing that the notes and the Note Guarantee shall be secured
      equally and ratably with such Indebtedness, except that the foregoing
      restrictions shall not apply to:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      Liens on any Principal Property acquired after the Issuance Date to secure
      or
      provide for the payment of the purchase price or acquisition cost thereof;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      Liens on Principal Property acquired after the Issuance Date existing at the
      time such Principal Property is acquired;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      Liens on any Principal Property acquired from a corporation merged with or
      into
      AREP or any Guarantor;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      Liens in favor of AREP or any Guarantor;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      Liens in existence on any Principal Property on the Issuance Date;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(6)
      Liens on any Principal Property constituting unimproved real property
      constructed or improved after the Issuance Date to secure or provide for the
      payment or cost of such construction or improvement;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(7)
      Liens in favor of, or required by, governmental authorities;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(8)
      pledges or deposits in connection with workers&#8217; compensation, unemployment
      insurance and other social security legislation and deposits securing liability
      to insure carriers under insurance arrangements;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(9)
      Liens for taxes, assessments or governmental charges or statutory liens of
      landlords, carriers, warehousemen, mechanics, suppliers, materialmen, repairmen
      or other similar Liens arising in the ordinary course of business or in the
      improvement or repair of any Principal Property not yet due or which are being
      contested in good faith by appropriate proceedings;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(10)
      any judgment attachment or judgment Lien not constituting an Event of
      Default;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(11)
      Liens to secure the performance of statutory obligations, surety or appeal
      bonds, performance bonds or other obligations of a like nature incurred in
      the
      ordinary course of business and in the improvement or repair of any Principal
      Property and which obligations are not expressly prohibited by the
      indenture;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">49</div>
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    <div style="PADDING-LEFT: 18pt; TEXT-INDENT: 18pt">(12)
      Liens to secure Indebtedness of AREP or any Guarantor attributable to Bad Boy
      Guarantees;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(13)
      Liens in favor of the trustee and required by the covenant &#8220;Maintenance of
      Interest Coverage&#8221;;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(14)
      Liens to secure margin Indebtedness; provided that such Liens are secured solely
      by the applicable margin securities; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(15)
      any extension, renewal, substitution or replacement (or successive extensions,
      renewals, substitutions or replacements), in whole or in part, of any Lien
      referred to in the foregoing clauses (i) through (xiv), inclusive;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">provided that in the case
      of
      clauses (1), (2) and (3) such Liens shall only extend to the Principal Property
      so acquired (including through any merger or consolidation) and not to any
      other
      Principal Property of AREP or any Guarantor.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Maintenance of
      Interest Coverage</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On each
      Quarterly Determination Date, the Fixed Charge Coverage Ratio of AREP and the
      Guarantors will be at least 1.5 to 1.0 for the four consecutive fiscal quarters
      most recently completed prior to such Quarterly Determination Date; provided
      that, in the event that the Fixed Charge Coverage Ratio of AREP and the
      Guarantors is less than 1.5 to 1.0 for such four consecutive fiscal quarters,
      the Issuers shall be deemed to have satisfied this maintenance test if there
      is
      deposited, within 2 Business Days of such Quarterly Determination Date, an
      amount in cash such that the deposited funds, together with any funds previously
      deposited pursuant to this covenant (and that have not been paid out or
      otherwise released) are in an amount equal to the Issuers&#8217; obligations to pay
      interest on the notes for one year; provided further, that the Issuers shall
      grant to the trustee, on behalf of the holders of the notes, a first priority
      security interest in such deposited funds. At any subsequent Quarterly
      Determination Date, if the Fixed Charge Coverage Ratio of AREP and the
      Guarantors is at least 1.5 to 1.0 for the four consecutive fiscal quarters
      most
      recently completed prior to such Quarterly Determination Date, such deposited
      funds will be released from the security interest granted to the trustee and
      paid to or at the direction of AREP.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Maintenance of
      Total Unencumbered Assets</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On each
      Quarterly Determination Date, the ratio of Total Unencumbered Assets to the
      then
      outstanding principal amount of the Unsecured Indebtedness will be greater
      than
      1.5 to 1.0 as of the last day of the fiscal quarter most recently
      completed.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Compliance with
      Law</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREP
      will, and will cause its Subsidiaries (including any Guarantor) to, comply
      in
      all material respects with all applicable laws, rules and regulations.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>No Investment
      Company</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Neither
      AREP nor any Guarantor will register as an &#8220;investment company&#8221; as such term is
      defined in the Investment Company Act.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Merger,
      Consolidation or Sale of Assets</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREP
      will
      not: (1) consolidate or merge with or into another Person (whether or not AREP,
      is the surviving entity) or (2) sell, assign, transfer, convey or otherwise
      dispose of all or substantially all of the properties or assets of AREP in
      one
      or more related transactions, to another Person; unless:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      either: (a) AREP is the surviving entity, or (b) the Person formed by or
      surviving any such consolidation or merger (if other than AREP) or to which
      such
      sale, assignment, transfer, conveyance or other disposition has been made is
      a
      corporation, limited liability company or limited partnership entity organized
      or existing under the laws of the United States, any state of the United States
      or the District of Columbia;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the Person formed by or surviving any such consolidation or merger (if other
      than AREP) or the Person to which such sale, assignment, transfer, conveyance
      or
      other disposition has been made assumes all the obligations of AREP under the
      notes, the indenture and the registration rights agreement and upon such
      assumption such Person will become the successor to, and be substituted for,
      AREP thereunder and all </div>
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    <div style="MARGIN: 0pt" align="center">50</div>
    <div style="MARGIN: 0pt"><br></div>
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 </div>
    <div style="PADDING-LEFT: 18pt">
references
      to AREP in each thereof shall then become references to such Person and such
      Person shall thereafter be able to exercise every right and power of AREP
      thereunder;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      immediately after such transaction no Default or Event of Default exists;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      AREP or the Person formed by or surviving any such consolidation or merger
      (if
      other than AREP), or to which such sale, assignment, transfer, conveyance or
      other disposition has been made would, on the date of such transaction after
      giving pro forma effect thereto and any related financing transactions as if
      the
      same had occurred at the beginning of the applicable four-quarter period, be
      permitted to incur at least $1.00 of additional Indebtedness pursuant to the
      first paragraph of the covenant described above under the caption &#8220;&#8212; Incurrence
      of Indebtedness and Issuance of Preferred Stock; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      AREP has delivered to the trustee an Officers&#8217; Certificate and opinion of
      counsel, which may be an opinion of in-house counsel of AREP or an Affiliate,
      each stating that such transaction complies with the terms of the
      indenture.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Clauses
      (1), (2) or (4) above will not apply to or be required to be complied with
      in
      connection with any merger or consolidation or the sale, assignment, transfer,
      conveyance or other disposition of all or substantially all of AREP&#8217;s properties
      or assets to:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      an Affiliate that has no material assets or liabilities where the primary
      purpose of such transaction is to change AREP into a corporation or other form
      of business entity or to change the jurisdiction of formation of AREP and such
      transaction does not cause the realization of any material federal or state
      tax
      liability that will be paid by AREP or any of its Subsidiaries (including AREH).
      For purposes of this paragraph, the term material refers to any assets,
      liabilities or tax liabilities that are greater than 5.0% of the Tangible Net
      Worth of AREP and its Subsidiaries (including AREH) on a consolidated basis;
      or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      any Person; provided that AREP receives consideration in Cash Equivalents and
      marketable securities with an aggregate Fair Market Value determined at the
      time
      of the execution of such relevant agreement of at least $1.0&#160;billion for
      such merger or consolidation or the sale, assignment, transfer, conveyance
      or
      other disposition of all or substantially all of AREP&#8217;s properties or assets. In
      any transaction referred to in this clause (2), and subject to the terms and
      conditions thereof, the trustee shall, without the need of any action by the
      noteholders, (x) confirm that such Person shall not be liable for and release
      such Person from, any obligation of AREP&#8217;s under the indenture and the notes and
      (y) release any Guarantor from all obligations under its Note Guarantee if
      such
      Guarantor was directly or indirectly sold, assigned, transferred, conveyed
      or
      otherwise disposed of to such Person in such transaction.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREP
      or
      the Person formed by or surviving any merger or consolidation will not have
      to
      comply with clause (4) above in connection with any merger or consolidation
      if
      the effect of the merger or consolidation is to cause the Capital Stock of
      AREP
      not owned by the Principal or any Affiliate of the Principal to be retired
      or
      extinguished for consideration that was provided by the Principal or an
      Affiliate of the Principal (other than AREP or its Subsidiaries (including
      AREH)
      or the Person formed by or surviving any merger or consolidation) and the
      Partners&#8217; Equity immediately after giving effect to the merger or consolidation
      is not less than the Partners&#8217; Equity immediately prior to such merger or
      consolidation.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition, AREP may not lease all or substantially all of its properties or
      assets, in one or more related transactions, to any other Person. In the case
      of
      a lease of all or substantially all of the assets of AREP, AREP will not be
      released from its obligations under the notes or the indenture, as
      applicable.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREH
      will
      not: (1) consolidate or merge with or into another Person (whether or not AREH,
      is the surviving entity) or (2) sell, assign, transfer, convey or otherwise
      dispose of all or substantially all of the properties or assets of AREH in
      one
      or more related transactions, to another Person; unless:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      either: (a) AREH is the surviving entity, or (b) the Person formed by or
      surviving any such consolidation or merger (if other than AREH) or to which
      such
      sale, assignment, transfer, conveyance or other disposition has been made is
      a
      corporation, limited liability company or limited partnership entity organized
      or existing under the laws of the United States, any state of the United States
      or the District of Columbia;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the Person formed by or surviving any such consolidation or merger (if other
      than AREH) or the Person to which such sale, assignment, transfer, conveyance
      or
      other disposition has been made assumes all the </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">51</div>
    <div style="MARGIN: 0pt"><br></div>
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 </div>
    <div style="PADDING-LEFT: 18pt">
obligations
      of AREH under the Note Guarantee (and becomes a Guarantor), the notes, the
      indenture and the registration rights agreement, and upon such assumption such
      Person will become the successor to, and be substituted for, AREH thereunder,
      and all references to AREH in each thereof shall than become references to
      such
      Person and such Person shall thereafter be able to exercise every right and
      power of AREH thereunder;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      immediately after such transaction no Default or Event of Default exists;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      AREH or the Person formed by or surviving any such consolidation or merger
      (if
      other than AREP), or to which such sale, assignment, transfer, conveyance or
      other disposition has been made would, on the date of such transaction after
      giving pro forma effect thereto and any related financing transactions as if
      the
      same had occurred at the beginning of the applicable four-quarter period, be
      permitted to incur at least $1.00 of additional Indebtedness pursuant to the
      first paragraph of the covenant described above under the caption<br>&#8220;&#8212;
Incurrence of Indebtedness and Issuance of Preferred Stock; and</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5) AREH
      has delivered to the trustee an Officers&#8217; Certificate and opinion of counsel
      which may be an opinion of in-house counsel of AREP or an Affiliate, each
      stating that such transaction complies with the terms of the indenture.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Clauses
      (1), (2) or (4) above will not apply to or be required to be complied with
      in
      connection with any merger or consolidation or the sale, assignment, transfer,
      conveyance or other disposition of all or substantially all of AREH&#8217;s properties
      or assets to:</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1) an
      Affiliate that has no material assets or liabilities where the primary purpose
      of such transaction is to change AREH into a corporation or other form of
      business entity or to change the jurisdiction of formation of AREH and such
      transaction does not cause the realization of any material federal or state
      tax
      liability that will be paid by AREH or any of its Subsidiaries. For purposes
      of
      this paragraph, the term material refers to any assets, liabilities or tax
      liabilities that are greater than 5.0% of the Tangible Net Worth of AREP and
      its
      Subsidiaries (including AREH) on a consolidated basis;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2) any
      Person; provided that AREP receives consideration in Cash Equivalents and
      marketable securities with an aggregate Fair Market Value determined at the
      time
      of the execution of such relevant agreement of at least $1.0&#160;billion for
      such merger or consolidation or the sale, assignment, transfer, conveyance
      or
      other disposition of all or substantially all of AREH&#8217;s properties or assets;
      or</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3) any
      Person; provided that AREH receives consideration in Cash Equivalents and
      marketable securities with an aggregate Fair Market Value determined at the
      time
      of the execution of such relevant agreement of at least $1.0&#160;billion for
      such merger or consolidation or the sale, assignment, transfer, conveyance
      or
      other disposition of all or substantially all of AREH&#8217;s properties or assets and
      AREH remains a Subsidiary of AREP.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In any
      transaction referred to in clause (2) or (3) above, and subject to the terms
      and
      conditions thereof, the trustee shall, without the need of any action by the
      noteholders, (x) confirm that such other Person shall not be liable for and
      shall be released from any obligation of AREP&#8217;s or AREH&#8217;s under the indenture,
      the notes and the Note Guarantees, and (y) release any Guarantor from all
      obligations under its Note Guarantee if such Guarantor was directly or
      indirectly sold, assigned, transferred, conveyed or otherwise disposed of to
      such Person in such transaction.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">This
      &#8220;Merger, Consolidation or Sale of Assets&#8221; covenant will not apply to:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      any consolidation or merger, or any sale, assignment, transfer, conveyance,
      lease or other disposition of assets between or among AREP, AREH or any one
      or
      more Guarantors; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      any sale, assignment, transfer, conveyance or other disposition of Cash
      Equivalents, including, without limitation, any investment or capital
      contribution of Cash Equivalents, or any purchase of property and assets,
      including, without limitation, securities, debt obligations or Capital Stock,
      with Cash Equivalents.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Transactions
      with
      Affiliates</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREP
      will
      not, and will not permit any of its Subsidiaries (including any Guarantor)
      to,
      make any payment to, or sell, lease, transfer or otherwise dispose of any of
      its
      properties or assets to, or purchase any property or assets </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">52</div>
    <div style="MARGIN: 0pt"><br></div>
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from,
      or enter into or make or amend any transaction, contract, agreement,
      understanding, loan, advance or guarantee with, any Affiliate of AREP (each,
      an
&#8220;<i>Affiliate Transaction</i>&#8221;), unless:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      the Affiliate Transaction is on terms that are not materially less favorable
      to
      AREP or the relevant Subsidiary (including any Guarantor) than those that would
      have been obtained in a comparable transaction by AREP or such Subsidiary
      (including any Guarantor) with an unrelated Person as determined in good faith
      by the Board of Directors of AREP; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      AREP delivers to the trustee:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(a)
      with respect to any Affiliate Transaction or series of related Affiliate
      Transactions involving aggregate consideration in excess of $2.0&#160;million, a
      resolution of the Board of Directors of AREP set forth in an Officers&#8217;
Certificate certifying that such Affiliate Transaction complies with this
      covenant and that such Affiliate Transaction has been approved by a majority
      of
      the disinterested members of the Board of Directors of AREP; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(b)
      with respect to any Affiliate Transaction or series of related Affiliate
      Transactions involving aggregate consideration in excess of $10.0&#160;million,
      an opinion as to the fairness to AREP or such Subsidiary (including any
      Guarantor) of such Affiliate Transaction from a financial point of view issued
      by an accounting, appraisal or investment banking firm of recognized
      standing.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      following items will not be deemed to be Affiliate Transactions and, therefore,
      will not be subject to the provisions of the prior paragraph:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      any employment agreement, employee benefit plan, officer or director
      indemnification agreement or any similar arrangement entered into by AREP or
      any
      of its Subsidiaries (including any Guarantor) in the ordinary course of business
      and payments pursuant thereto including payments or reimbursement of payments
      by
      API with respect to any such agreement, plan or arrangement entered into by
      API
      with respect to or for the benefit of officers or directors of API (other than
      any such agreements, plans or arrangements entered into by AREP or any of its
      Subsidiaries (including AREH) with Carl Icahn (other than employee benefit
      plans
      and officer or director indemnification agreements generally applicable to
      officers and directors of API, AREP or its Subsidiaries (including AREH));</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      transactions between or among AREP, any Guarantor and/or their respective
      Subsidiaries (except any Subsidiaries of which Carl Icahn or Affiliates of
      Carl
      Icahn (other then AREP, AREH or their Subsidiaries) own more than 10% of the
      Voting Stock);</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      payment (or reimbursement of payments by API) of directors&#8217; fees to Persons who
      are not otherwise Affiliates of AREP;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      any issuance of Equity Interests (other than Disqualified Stock) and Preferred
      Unit Distributions of AREP to Affiliates of AREP;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      Restricted Payments that do not violate the provisions of the indenture
      described above under the caption &#8220;&#8212; Restricted Payments&#8221;;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(6)
      transactions between AREP and/or any of its Subsidiaries (including any
      Guarantor), on the one hand, and other Affiliates, on the other hand, for the
      provision of goods or services in the ordinary course of business by such other
      Affiliates; provided that such other Affiliate is in the business of providing
      such goods or services in the ordinary course of business to unaffiliated third
      parties and the terms and pricing for such goods and services overall are not
      less favorable to AREP and/or its Subsidiaries (including AREH) than the terms
      and pricing upon which such goods and services are provided to unaffiliated
      third parties;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(7)
      the provision or receipt of accounting, financial, management, information
      technology and other ancillary services to or from Affiliates, provided that
      AREP or its Subsidiaries (including any Guarantor) in the case of the provision
      of such services, are paid a fee not less than its out of pocket costs and
      allocated overhead (including a portion of salaries and benefits) and in the
      case of the receipt of such services, paid a fee not more than such Person&#8217;s
      out-of-pocket costs and allocated overhead (including a portion of salaries
      and
      benefits), in each case, as determined by AREP in its reasonable judgment;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">53</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>
<div style="TEXT-INDENT: 18pt; PADDING-LEFT: 18pt">(8)
      the license of a portion of office space pursuant to a license agreement, dated
      as of February&#160;1, 1997, between AREP and an Affiliate of API and any
      renewal thereof;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(9)
      the payment to API and reimbursements of payments made by API of expenses
      relating to AREP&#8217;s, AREH&#8217;s or any Guarantors&#8217; status as a public company;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(10)
      services provided and payments received by NEG from NEG Operating LLC,
      TransTexas Gas Corporation and Panaco, Inc. pursuant to the NEG Management
      Agreements;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(11)
      the pledge by NEG of its interest in the Capital Stock of NEG Holding LLC
      pursuant to the NEG Credit Agreement;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(12)
      the exchange by AREH of its GB Securities for other securities of GB Holdings,
      Inc.; provided that such exchange is on terms no less favorable to AREH as
      the
      exchange of GB Securities offered to other non-Affiliated Persons;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(13)
      payments by AREH, AREP or any Subsidiary to API in connection with services
      provided to AREH, AREP or any Subsidiary in accordance with the AREP Partnership
      Agreement; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(14)
      the Acquisitions.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Reports</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Whether
      or not required by the rules and regulations of the SEC, so long as any notes
      are outstanding, the Issuers will furnish to the holders of notes or cause
      the
      trustee to furnish to the holders of notes, within the time periods specified
      in
      the SEC&#8217;s rules and regulations:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      all quarterly and annual reports that would be required to be filed with the
      SEC
      on Forms 10-Q and 10-K if the Issuers were required to file such reports;
      and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      all current reports that would be required to be filed with the SEC on Form
      8-K
      if the Issuers were required to file such reports.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">All such
      reports will be prepared in all material respects in accordance with all of
      the
      rules and regulations applicable to such reports. Each annual report on Form
      10-K will include a report on the Issuers&#8217; consolidated financial statements by
      the Issuers&#8217; certified independent accountants. In addition, the Issuers will
      file a copy of each of the reports referred to in clauses (1) and (2) above
      with
      the SEC for public availability within the time periods specified in the rules
      and regulations applicable to such reports (unless the SEC will not accept
      such
      a filing) and, if the SEC will not accept such a filing, will post the reports
      on its website within those time periods.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If, at
      any time, the Issuers are no longer subject to the periodic reporting
      requirements of the Exchange Act for any reason, the Issuers will nevertheless
      continue filing the reports specified in the preceding paragraphs of this
      covenant with the SEC within the time periods specified above unless the SEC
      will not accept such a filing. The Issuers will not take any action for the
      purpose of causing the SEC not to accept any such filings. If, notwithstanding
      the foregoing, the SEC will not accept the Issuers&#8217; filings for any reason, the
      Issuers will post the reports referred to in the preceding paragraphs on its
      website within the time periods that would apply if the Issuers were required
      to
      file those reports with the SEC.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition, the Issuers agree that, for so long as any notes remain outstanding,
      if at any time they are not required to file with the SEC the reports required
      by the preceding paragraphs, they will furnish to the holders of notes and
      to
      securities analysts and prospective investors, upon their request, the
      information required to be delivered pursuant to Rule 144A(d)(4) under the
      Securities Act.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Events of Default
      and
      Remedies</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      following constitutes an Event of Default:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      default in payment when due and payable, upon redemption or otherwise, of
      principal or premium, if any, on the notes;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      default for 30 days or more in the payment when due of interest or Liquidated
      Damages on the notes;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">54</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>
<div style="TEXT-INDENT: 18pt; PADDING-LEFT: 18pt">(3)
      failure by the Issuers to call or cause to be called for redemption or to
      purchase or cause to be called any notes, in each case when required under
      the
      indenture;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      failure by AREP or any Guarantor for 30 days after written notice from the
      trustee to comply with the provisions described under the captions &#8220;&#8212; Restricted
      Payments&#8221; or &#8220;&#8212; Incurrence of Indebtedness and Issuance of Preferred
      Stock&#8221;;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      failure by AREP or any Guarantor for 30 days after written notice from the
      trustee to comply with the provisions described under the captions &#8220;&#8212;
Maintenance of Interest Coverage&#8221; or &#8220;&#8212; Maintenance of Total Unencumbered
      Assets&#8221;;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(6)
      failure by the Issuers or any Guarantor for 60 days after notice from the
      trustee or the holders of at least 25% in aggregate principal amount of the
      notes then outstanding to comply with any of their other agreements in the
      indenture or the notes or the Note Guarantee;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(7)
      default under any mortgage, indenture or instrument under which there is issued
      or by which there is secured or evidenced any Indebtedness for money borrowed
      by
      the Issuers or any Guarantor or default on any Guarantee by the Issuers or
      AREH
      of Indebtedness, whether such Indebtedness or Guarantee now exists or is created
      after the Issuance Date, which default (a) is caused by a failure to pay when
      due at final maturity (giving effect to any grace period or waiver related
      thereto) the principal of such Indebtedness (a &#8220;Payment Default&#8221;) or (b) results
      in the acceleration of such Indebtedness prior to its express maturity and,
      in
      each case, the principal amount of any such Indebtedness as to which AREP or
      any
      Guarantor is obligated to pay, together with the principal amount of any other
      such Indebtedness under which a Payment Default then exists or with respect
      to
      which the maturity thereof has been so accelerated or which has not been paid
      at
      maturity as to which AREP or any Guarantor is obligated to pay, aggregates
      $10.0&#160;million or more;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(8)
      failure by the Issuers or any Guarantor to pay final judgments aggregating
      in
      excess of $10.0&#160;million, which final judgments remain unpaid, undischarged
      or unstayed for a period of more than 60 days after such judgment becomes a
      final judgment;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(9)
      except as permitted by the indenture, any Note Guarantee is held in any judicial
      proceeding to be unenforceable or invalid or ceases for any reason to be in
      full
      force and effect, or AREH or any other Guarantor, or any Person acting on behalf
      of any Guarantor, denies or disaffirms its obligations under its Note Guarantee;
      and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(10)
      certain events of bankruptcy or insolvency with respect to AREP or any Guarantor
      that is a Significant Subsidiary.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If any
      Event of Default (other than by reason of bankruptcy or insolvency) occurs
      and
      is continuing, the holders of more than 25% in principal amount of the then
      outstanding notes may declare the principal, premium, if any, interest,
      Liquidated Damages, if any, and any other monetary obligations on all the notes
      to be due and payable immediately. Notwithstanding the foregoing, in the case
      of
      an Event of Default arising from certain events of bankruptcy or insolvency,
      with respect to the Issuers or any Guarantor that is a Significant Subsidiary
      all outstanding notes will become due and payable without further action or
      notice. Holders of the notes may not enforce the indenture or the notes except
      as provided in the indenture. Subject to certain limitations, holders of a
      majority in principal amount of the then outstanding notes may direct the
      trustee in its exercise of any trust or power conferred on it. However, the
      trustee may refuse to follow any direction that conflicts with law or the
      indenture that the trustee determines may be unduly prejudicial to the rights
      of
      other holders of notes or that may involve the trustee in personal liability.
      The trustee may withhold from holders of notes notice of any continuing Default
      or Event of Default (except a Default or Event of Default relating to the
      payment of principal or interest) if it determines that withholding notice
      is in
      the interests of the holders of the notes. In addition, the trustee shall have
      no obligation to accelerate the notes if in the best judgment of the trustee
      acceleration is not in the best interest of the holders of the notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">At any
      time after a declaration of acceleration with respect to the notes and subject
      to certain conditions, the holders of a majority in aggregate principal amount
      of notes outstanding may rescind and cancel such acceleration and its
      consequences.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      holders of at least a majority in aggregate principal amount of the notes then
      outstanding by notice to the trustee may on behalf of the holders of all of
      the
      notes waive any existing Default or Event of Default and its </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">55</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
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consequences
      under the indenture except a continuing Default or Event of Default in the
      payment of interest on, premium, if any, or the principal of, any note held
      by a
      non-consenting holder.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Issuers will be required to deliver to the trustee annually a statement
      regarding compliance with the indenture, and the Issuers will be required,
      within ten Business Days, upon becoming aware of any Default or Event of Default
      to deliver to the trustee a statement specifying such Default or Event of
      Default.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>No Personal Liability
      of Directors, Officers, Employees, Incorporators and Stockholders</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">No
      director, officer, employee, incorporator, manager (or managing member) direct
      or indirect member, partner or stockholder of the Issuers, AREH, API or any
      additional Guarantor shall have any liability for any obligations of the
      Issuers, AREH, API or any additional Guarantor under the notes, the indenture,
      any Note Guarantee or for any claim based on, in respect of, or by reason of
      such obligations or its creation. Each holder of the notes by accepting a note
      waives and releases all such liability. The waiver and release are part of
      the
      consideration for issuance of the notes.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Covenant
      Defeasance</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Issuers may, at their option and at any time, elect to have their obligations
      and the obligations of any of their Subsidiaries or AREH released with respect
      to certain covenants that are described in the indenture (&#8220;<i>Covenant
      Defeasance</i>&#8221;) and, thereafter, any omission to comply with such obligations
      shall not constitute a Default or Event of Default with respect to the notes
      or
      any Note Guarantee. In the event Covenant Defeasance occurs, certain events
      (not
      including non-payment, bankruptcy, receivership, rehabilitation and insolvency
      events) described under &#8220;Events of Default&#8221; will no longer constitute an Event
      of Default with respect to the notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In order
      to exercise Covenant Defeasance:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      the Issuers must irrevocably deposit, or cause to be deposited, with the
      trustee, in trust, for the benefit of the holders of the notes, cash in U.S.
      dollars, non-callable Government Securities, or a combination thereof, in such
      amounts as will be sufficient to pay the principal of, premium, if any, interest
      and Liquidated Damages, if any, due on the outstanding notes on the stated
      maturity date or on the applicable redemption date, as the case may be, in
      accordance with the terms of the indenture;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      no Default or Event of Default shall have occurred and be continuing with
      respect to certain Events of Default on the date of such deposit;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      such Covenant Defeasance shall not result in a breach or violation of, or
      constitute a default under any material agreement or instrument (other than
      the
      indenture) to which the Issuers or any of their Subsidiaries is a party or
      by
      which the Issuers or any of their Subsidiaries is bound;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      the Issuers shall have delivered to the trustee an opinion of counsel, which
      may
      be an opinion of in-house counsel to AREP or an Affiliate, containing customary
      assumptions and exceptions, to the effect that upon and immediately following
      the deposit, the trust funds will not be subject to the effect of any applicable
      bankruptcy, insolvency, reorganization or similar laws affecting creditors&#8217;
rights generally under any applicable law;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      the Issuers shall have delivered to the trustee an Officers&#8217; Certificate stating
      that the deposit was not made by the Issuers with the intent of defeating,
      hindering, delaying or defrauding any creditors of AREP or others; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(6)
      the Issuers shall have delivered to the trustee an Officers&#8217; Certificate and an
      opinion of counsel in the United States, which may be an opinion of in-house
      counsel to AREP or an Affiliate (which opinion of counsel may be subject to
      customary assumptions and exclusions) each stating that all conditions precedent
      provided for or relating to the Covenant Defeasance have been complied
      with.</div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">56</div>
    <div style="MARGIN: 0pt"><br></div>
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<strong>Satisfaction and
      Discharge</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      indenture will be discharged and will cease to be of further effect as to all
      notes issued thereunder, when:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      either:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(a)
      all notes that have been authenticated, except lost, stolen or destroyed notes
      that have been replaced or paid and notes for whose payment money has been
      deposited in trust and thereafter repaid to AREP, have been delivered to the
      trustee for cancellation; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(b)
      all notes that have not been delivered to the trustee for cancellation (1)
      have
      become due and payable by reason of the mailing of a notice of redemption or
      otherwise, (2) will become due and payable within one year or (3) are to be
      called for redemption within 12 months under arrangements reasonably
      satisfactory to the trustee for the giving of notice of redemption by the
      trustee in the name, and at the reasonable expense of the Issuers, and the
      Issuers or any Guarantor have irrevocably deposited or caused to be deposited
      with the trustee as trust funds in trust solely for the benefit of the holders,
      cash in U.S. dollars, non-callable Government Securities, or a combination
      of
      cash in U.S. dollars and non-callable Government Securities, in amounts as
      will
      be sufficient without consideration of any reinvestment of interest, to pay
      and
      discharge the entire Indebtedness on the notes not delivered to the trustee
      for
      cancellation for principal and premium, if any, and accrued but unpaid interest
      to the date of maturity or redemption;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      no Default of Event of Default has occurred and is continuing on the date of
      the
      deposit or will occur as a result of the deposit and the deposit will not result
      in a breach or violation of, or constitute a default under, any other material
      instrument to which the Issuers are a party or by which the Issuers are
      bound;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      the Issuers have paid or caused to be paid all sums payable by it under the
      indenture; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(<font style="FONT-FAMILY: Times New (W1)">4)
      the Issuers or any Guarantor have
      delivered irrevocable instructions to the trustee under the indenture to apply
      the deposited money toward the payment of the notes at maturity or the
      redemption date, as the case may be.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition, the Issuers must deliver an Officers&#8217; Certificate and an opinion of
      counsel to the trustee stating that all conditions precedent to satisfaction
      and
      discharge have been satisfied.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Amendment, Supplement
      and Waiver</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Except
      as
      provided in the next two succeeding paragraphs, the indenture, the notes or
      the
      Note Guarantee may be amended or supplemented with the consent of the holders
      of
      at least a majority in principal amount of the notes then outstanding (including
      consents obtained in connection with a tender offer or exchange offer for
      notes), and any existing default or compliance with any provision of the
      indenture, the notes or the Note Guarantee may be waived with the consent of
      the
      holders of a majority in principal amount of the then outstanding notes
      (including consents obtained in connection with a tender offer or exchange
      offer
      for notes).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Without
      the consent of each holder affected, an amendment or waiver may not (with
      respect to any notes held by a nonconsenting holder of notes):</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      reduce the principal amount of notes whose holders must consent to an amendment,
      supplement or waiver;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      reduce the principal of or change the fixed maturity of any note or alter or
      waive the provisions with respect to the redemption of the notes;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      reduce the rate of or change the time for payment of interest on any note;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      waive a Default or Event of Default in the payment of principal of, premium
      or
      interest on the notes (except a rescission of acceleration of the notes by
      the
      holders of at least a majority in aggregate principal amount of the notes and
      a
      waiver of the payment default that resulted from such acceleration);</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      make any note payable in money other than that stated in the notes;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(6)
      make any change in the provisions of the indenture relating to waivers of past
      Defaults or the rights of holders of notes to receive payments of principal
      of
      or premium, if any, or interest on the notes;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">57</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>
<div style="PADDING-LEFT: 18pt; TEXT-INDENT: 18pt">(7)
      release AREH or any other Guarantor from any of its obligations under its Note
      Guarantee or the indenture, except in accordance with the terms of the
      indenture; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(8)
      make any change in the foregoing amendment and waiver provisions.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Notwithstanding
      the foregoing, without the consent of any holder of notes, the Issuers, the
      Guarantors and the trustee together may amend or supplement the indenture,
      any
      Note Guarantee or the notes to cure any ambiguity, defect or inconsistency,
      to
      comply with the covenant relating to mergers, consolidations and sales of
      assets, to provide for uncertificated notes in addition to or in place of
      certificated notes, to provide for the assumption of the Issuers&#8217; or any
      Guarantor&#8217;s obligations to holders of the notes and any Note Guarantee in the
      case of a merger, consolidation or asset sale, to make any change that would
      provide any additional rights or benefits to the holders of the notes or that
      does not adversely affect the legal rights under the indenture of any such
      holder.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Concerning the
      Trustee</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      indenture will contain certain limitations on the rights of the trustee, should
      it become a creditor of the Issuers or AREH, to obtain payment of claims in
      certain cases, or to realize on certain property received in respect of any
      such
      claim as security or otherwise. The trustee will be permitted to engage in
      other
      transactions; however, if it acquires any conflicting interest it must eliminate
      such conflict within 90 days or resign.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      holders of a majority in aggregate principal amount of the then outstanding
      notes will have the right to direct the time, method and place of conducting
      any
      proceeding for exercising any remedy available to the trustee, subject to
      certain exceptions. The indenture will provide that in case an Event of Default
      shall occur (which shall not be cured), the trustee will be required, in the
      exercise of its power, to use the degree of care of a prudent person in the
      conduct of his own affairs. Subject to such provisions, the trustee will be
      under no obligation to exercise any of its rights or powers under the indenture
      at the request of any holder of notes, unless such holder shall have offered
      to
      the trustee security and indemnity satisfactory to it against any loss,
      liability or expense.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Governing
      Law</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      indenture and the notes will be, subject to certain exceptions, governed by
      and
      construed in accordance with the internal laws of the State of New York, without
      regard to the choice of law rules thereof.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      issuance of the notes and the Note Guarantee will also be subject to a certain
      extent to the laws of the jurisdiction of formation of AREP.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Additional
      Information</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Any
      holder of the notes may obtain a copy of the indenture without charge by writing
      to American Real Estate Partners, L.P., Attn: Chief Financial Officer at 765
      Fifth Avenue, New York, NY 10153.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Book-Entry, Delivery
      and Form</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The new
      notes will be issued in one or more notes in global form or Global Notes. Except
      as set forth below, the notes will be issued in registered, global form in
      minimum denominations of $1,000 and integral multiples of $1,000 in excess
      of
      $1,000. The Global Notes will be deposited upon issuance with the trustee as
      custodian for DTC or its nominee, in each case for credit to an account of
      a
      direct or indirect participant in DTC, as described below.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Except
      as
      set forth below, the Global Notes may be transferred, in whole and not in part,
      only to another nominee of DTC or to a successor of DTC or its nominee.
      Beneficial interests in the Global Notes may not be exchanged for definitive
      notes in registered certificated form (&#8220;Certificated Notes&#8221;) except in the
      limited circumstances described below. See &#8220;&#8212; Exchange of Global Notes for
      Certificated Notes.&#8221; Except in the limited circumstances described below, owners
      of beneficial interests in the Global Notes will not be entitled to receive
      physical delivery of notes in certificated form.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition, transfers of beneficial interests in the Global Notes will be subject
      to the applicable rules and procedures of DTC and its direct and indirect
      participants (including, if applicable, those of Euroclear and Clearstream),
      which may change from time to time.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">58</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>
<div style="TEXT-INDENT: 18pt">Prospective
      purchasers are advised that the laws of some states require that certain Persons
      take physical delivery in definitive form of securities that they own.
      Consequently, the ability to transfer beneficial interests in a Global Note
      to
      such Persons will be limited to such extent.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">So long
      as the Global Note Holder is the registered owner of any notes, the Global
      Note
      Holder will be considered the sole holder under the indenture of any notes
      evidenced by the Global Notes. Beneficial owners of notes evidenced by the
      Global Notes will not be considered the owners of holders of the notes under
      the
      indenture for any purpose, including with respect to the giving of any
      directions, instructions or approvals to the trustee thereunder. Neither the
      issuers nor the trustee will have any responsibility or liability for any aspect
      of the records of DTC or for maintaining, supervising or reviewing any record
      of
      DTC relating to the notes.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Depository
      Procedures</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      following description of the operations and procedures of DTC, Euroclear and
      Clearstream are provided solely as a matter of convenience. These operations
      and
      procedures are solely within the control of the respective settlement systems
      and are subject to changes by them. The Issuers take no responsibility for
      these
      operations and procedures and urge investors to contact the system or their
      participants directly to discuss these matters.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">DTC has
      advised the Issuers that DTC is a limited-purpose trust company created to
      hold
      securities for its participating organizations (collectively, the
&#8220;Participants&#8221;) and to facilitate the clearance and settlement of transactions
      in those securities between the Participants through electronic book-entry
      changes in accounts of its Participants. The Participants include securities
      brokers and dealers (including the initial purchaser), banks, trust companies,
      clearing corporations and certain other organizations. Access to DTC&#8217;s system is
      also available to other entities such as banks, brokers, dealers and trust
      companies that clear through or maintain a custodial relationship with a
      Participant, either directly or indirectly (collectively, the &#8220;Indirect
      Participants&#8221;). Persons who are not Participants may beneficially own securities
      held by or on behalf of DTC only through the Participants or the Indirect
      Participants. The ownership interests in, and transfers of ownership interests
      in, each security held by or on behalf of DTC are recorded on the records of
      the
      Participants and Indirect Participants.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><strong>Except
      as described below, owners of interests in the Global Notes will not have notes
      registered in their names, will not receive physical delivery of notes in
      certificated form and will not be considered the registered owners or &#8220;holders&#8221;
thereof under the indenture for any purpose.</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Payments
      in respect of the principal of, and interest and premium, if any, and Liquidated
      Damages, if any, on, a Global Note registered in the name of DTC or its nominee
      will be payable to DTC in its capacity as the registered holder under the
      indenture. Under the terms of the indenture, the Issuers and the trustee will
      treat the Persons in whose names the notes, including the Global Notes, are
      registered as the owners of the notes for the purpose of receiving payments
      and
      for all other purposes. Consequently, neither the Issuers or the trustee nor
      any
      agent of the Issuers or the trustee has or will have any responsibility or
      liability for:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      any aspect of DTC&#8217;s records or any Participant&#8217;s or Indirect Participant&#8217;s
      records relating to or payments made on account of beneficial ownership interest
      in the Global Notes or for maintaining, supervising or reviewing any of DTC&#8217;s
      records or any Participant&#8217;s or Indirect Participant&#8217;s records relating to the
      beneficial ownership interests in the Global Notes; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      any other matter relating to the actions and practices of DTC or any of its
      Participants or Indirect Participants.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">DTC has
      advised the Issuers that its current practice, upon receipt of any payment
      in
      respect of securities such as the notes (including principal and interest),
      is
      to credit the accounts of the relevant Participants with the payment on the
      payment date unless DTC has reason to believe that it will not receive payment
      on such payment date. Each relevant Participant is credited with an amount
      proportionate to its beneficial ownership of an interest in the principal amount
      of the relevant security as shown on the records of DTC. Payments by the
      Participants and the Indirect Participants to the beneficial owners of notes
      will be governed by standing instructions and customary practices and will
      be
      the responsibility of the Participants or the Indirect Participants and will
      not
      be the responsibility of DTC, the trustee or the Issuers. Neither the Issuers
      nor the trustee will be liable for any delay by DTC or any of the Participants
      or the Indirect Participants in identifying the beneficial owners of the notes,
      and the Issuers and the trustee may conclusively rely on and will be protected
      in relying on instructions from DTC or its nominee for all purposes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">59</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>
<div style="TEXT-INDENT: 18pt">Transfers
      between the Participants will be effected in accordance with DTC&#8217;s procedures,
      and will be settled in same-day funds, and transfers between participants in
      Euroclear and Clearstream will be effected in accordance with their respective
      rules and operating procedures.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Cross-market
      transfers between the Participants, on the one hand, and Euroclear or
      Clearstream participants, on the other hand, will be effected through DTC in
      accordance with DTC&#8217;s rules on behalf of Euroclear or Clearstream, as the case
      may be, by their respective depositaries; however, such cross-market
      transactions will require delivery of instructions to Euroclear or Clearstream,
      as the case may be, by the counterparty in such system in accordance with the
      rules and procedures and within the established deadlines (Brussels time) of
      such system. Euroclear or Clearstream, as the case may be, will, if the
      transaction meets its settlement requirements, deliver instructions to its
      respective depositary to take action to effect final settlement on its behalf
      by
      delivering or receiving interests in the relevant Global Note in DTC, and making
      or receiving payment in accordance with normal procedures for same-day funds
      settlement applicable to DTC. Euroclear participants and Clearstream
      participants may not deliver instructions directly to the depositories for
      Euroclear or Clearstream.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">DTC has
      advised the Issuers that it will take any action permitted to be taken by a
      holder of notes only at the direction of one or more Participants to whose
      account DTC has credited the interests in the Global Notes and only in respect
      of such portion of the aggregate principal amount of the notes as to which
      such
      Participant or Participants has or have given such direction. However, if there
      is an Event of Default under the notes, DTC reserves the right to exchange
      the
      Global Notes for legended notes in certificated form, and to distribute such
      notes to its Participants.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Although
      DTC, Euroclear and Clearstream have agreed to the foregoing procedures to
      facilitate transfers of interests in the Global Notes among participants in
      DTC,
      Euroclear and Clearstream, they are under no obligation to perform or to
      continue to perform such procedures, and may discontinue such procedures at
      any
      time. None of the Issuers, the trustee and any of their respective agents will
      have any responsibility for the performance by DTC, Euroclear or Clearstream
      or
      their respective participants or indirect participants of their respective
      obligations under the rules and procedures governing their operations.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Exchange of Global
      Notes for Certificated Notes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">A Global
      Note is exchangeable for Certificated Notes if:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      DTC (a) notifies the Issuers that it is unwilling or unable to continue as
      depositary for the Global Notes or (b) has ceased to be a clearing agency
      registered under the Exchange Act and, in either case, the Issuers fail to
      appoint a successor depositary;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the Issuers, at their option, notify the trustee in writing that it elects
      to
      cause the issuance of the Certificated Notes; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      there has occurred and is continuing a Default or Event of Default with respect
      to the notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition, beneficial interests in a Global Note may be exchanged for
      Certificated Notes upon prior written notice given to the trustee by or on
      behalf of DTC in accordance with the indenture. In all cases, Certificated
      Notes
      delivered in exchange for any Global Note or beneficial interests in Global
      Notes will be registered in the names, and issued in any approved denominations,
      requested by or on behalf of the depositary (in accordance with its customary
      procedures).</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Exchange of
      Certificated Notes for Global Notes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Certificated
      Notes may not be exchanged for beneficial interests in any Global Note unless
      the transferor first delivers to the trustee a written certificate (in the
      form
      provided in the indenture) to the effect that such transfer will comply with
      the
      appropriate transfer restrictions applicable to such notes.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Same Day Settlement
      and Payment</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Issuers will make payments in respect of the notes represented by the Global
      Notes (including principal, premium, if any, interest and Liquidated Damages,
      if
      any) by wire transfer of immediately available funds to the accounts specified
      by DTC or its nominee. The Issuers will make all payments of principal, interest
      and premium, if any, and Liquidated Damages, if any, with respect to
      Certificated Notes by wire transfer of immediately available funds to the
      accounts specified by the holders of the Certificated Notes or, if no such
      account is specified, by </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">60</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
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mailing
      a check to each such holder&#8217;s registered address. The notes represented by the
      Global Notes are expected to be eligible to trade in DTC&#8217;s Same-Day Funds
      Settlement System, and any permitted secondary market trading activity in such
      notes will, therefore, be required by DTC to be settled in immediately available
      funds. The Issuers expect that secondary trading in any Certificated Notes
      will
      also be settled in immediately available funds.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Because
      of time zone differences, the securities account of a Euroclear or Clearstream
      participant purchasing an interest in a Global Note from a Participant will
      be
      credited, and any such crediting will be reported to the relevant Euroclear
      or
      Clearstream participant, during the securities settlement processing day (which
      must be a business day for Euroclear and Clearstream) immediately following
      the
      settlement date of DTC. DTC has advised the Issuers that cash received in
      Euroclear or Clearstream as a result of sales of interests in a Global Note
      by
      or through a Euroclear or Clearstream participant to a Participant will be
      received with value on the settlement date of DTC but will be available in
      the
      relevant Euroclear or Clearstream cash account only as of the business day
      for
      Euroclear or Clearstream following DTC&#8217;s settlement date.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Certain
      Definitions</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Set forth
      below are certain defined terms used in the indenture. Reference is made to
      the
      indenture for full disclosure of all such terms, as well as any other
      capitalized terms used herein for which no definition is provided.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Acquired
      Debt&#8221;</i> means, with respect to any specified Person:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      Indebtedness of any other Person existing at the time such other Person is
      merged with or into or became a Subsidiary of such specified Person, whether
      or
      not such Indebtedness is incurred in connection with, or in contemplation of,
      such other Person merging with or into, or becoming a Subsidiary of, such
      specified Person; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      Indebtedness secured by a Lien encumbering any asset acquired by such specified
      Person.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Affiliate&#8221;</i>
      of any specified Person means any other Person directly or indirectly
      controlling or controlled by or under direct or indirect common control with
      such specified Person. For purposes of this definition, &#8220;control,&#8221; as used with
      respect to any Person, means the possession, directly or indirectly, of the
      power to direct or cause the direction of the management or policies of such
      Person, whether through the ownership of voting securities, by agreement or
      otherwise; provided that beneficial ownership of 10% or more of the Voting
      Stock
      of a Person will be deemed to be control. For purposes of this definition,
      the
      terms &#8220;controlling,&#8221; &#8220;controlled by&#8221; and &#8220;under common control with&#8221; have
      correlative meanings.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;API&#8221;</i>
      means American Property Investors, Inc.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;AREH&#8221;</i>
      means American Real Estate Holdings Limited Partnership.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;AREP&#8221;</i>
      means American Real Estate Partners, L.P.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;AREP
      Finance&#8221;</i> means American Real Estate Finance Corp.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;AREP
      Partnership Agreement&#8221;</i> means AREP&#8217;s Amended and Restated Agreement of
      Limited Partnership, dated May&#160;12, 1987 as amended February&#160;22, 1995
      and August&#160;16, 1996.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Bad
      Boy Guarantees&#8221;</i> means the Indebtedness of any specified Person attributable
      to &#8220;bad boy&#8221; indemnification or Guarantees, which Indebtedness would be
      non-recourse to AREP and AREH other than recourse relating to the specific
      events specified therein, which such events shall be usual and customary
      exceptions typically found in non-recourse financings at such time as determined
      by management in its reasonable judgment.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Beneficial
      Owner&#8221;</i> has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5
      under the Exchange Act, except that in calculating the beneficial ownership
      of
      any particular &#8220;person&#8221; (as that term is used in Section 13(d)(3) of the
      Exchange Act), such &#8220;person&#8221; will be deemed to have beneficial ownership of all
      securities that such &#8220;person&#8221; has the right to acquire by conversion or exercise
      of other securities, whether such right is currently exercisable or is
      exercisable only after the passage of time. The terms &#8220;Beneficially Owns&#8221; and
&#8220;Beneficially Owned&#8221; have a corresponding meaning.</div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">61</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
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</div>
<div style="TEXT-INDENT: 18pt"><i>&#8220;Board
      of Directors&#8221;</i> means:</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: -12pt">(1)</div>
    <div style="MARGIN: 0pt; TEXT-INDENT: 36pt">with respect to a corporation, the
      board of directors of the corporation or any committee thereof duly authorized
      to act on behalf of such board;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: -12pt">(2)</div>
    <div style="MARGIN: 0pt; TEXT-INDENT: 36pt">with respect to a partnership, the
      Board of Directors of the general partner of the partnership;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: -12pt">(3)</div>
    <div style="MARGIN: 0pt; TEXT-INDENT: 36pt">with respect to a limited liability
      company, the managing member or members or any controlling committee of managing
      members thereof or the Board of Directors of the managing member; and</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: -12pt">(4)</div>
    <div style="MARGIN: 0pt; TEXT-INDENT: 36pt">with respect to any other Person,
      the board or committee of such Person serving a similar function.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Business
      Day&#8221;</i> means any day excluding Saturday, Sunday and any day which is a legal
      holiday under the laws of the State of New York or is a day on which banking
      institutions located in such jurisdictions are authorized or required by law
      or
      other governmental action to close.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Capital
      Lease Obligation&#8221;</i> means, at the time any determination is to be made, the
      amount of the liability in respect of a capital lease that would at that time
      be
      required to be capitalized on a balance sheet prepared in accordance with GAAP,
      and the Stated Maturity thereof shall be the date of the last payment of rent
      or
      any other amount due under such lease prior to the first date upon which such
      lease may be prepaid by the lessee without payment of a penalty.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Capital
      Stock&#8221;</i> means:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      in the case of a corporation, corporate stock;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      in the case of an association or business entity, any and all shares, interests,
      participations, rights or other equivalents (however designated) of corporate
      stock;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      in the case of a partnership or limited liability company, partnership interests
      (whether general or limited) or membership interests; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      any other interest or participation that confers on a Person the right to
      receive a share of the profits and losses of, or distributions of assets of,
      the
      issuing Person but excluding from all of the foregoing any debt securities
      convertible into Capital Stock, whether or not such debt securities include
      any
      right of participation with Capital Stock.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Cash
      Equivalents&#8221;</i> means:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      United States dollars;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      securities issued or directly and fully guaranteed or insured by the United
      States government or any agency or instrumentality of the United States
      government (provided that the full faith and credit of the United States is
      pledged in support of those securities) having maturities of not more than
      one
      year from the date of acquisition;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      certificates of deposit and eurodollar time deposits with maturities of one
      year
      or less from the date of acquisition, bankers&#8217; acceptances with maturities not
      exceeding one year and overnight bank deposits, in each case, with any domestic
      commercial bank having capital and surplus in excess of $500.0&#160;million and
      a Thomson Bank Watch Rating of &#8220;B&#8221; or better;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      repurchase obligations with a term of not more than seven days for underlying
      securities of the types described in clauses (2) and (3) above entered into
      with
      any financial institution meeting the qualifications specified in clause (3)
      above;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      commercial paper having one of the two highest ratings obtainable from Moody&#8217;s
      Investors Service, Inc. or Standard &amp; Poor&#8217;s Rating Services and, in each
      case, maturing within one year after the date of acquisition; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(6)
      money market funds at least 95% of the assets of which constitute Cash
      Equivalents of the kinds described in clauses (1) through (5) of this
      definition.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">62</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>
<div style="TEXT-INDENT: 18pt"><i>&#8220;Cash
      Flow of AREP and the Guarantors&#8221;</i> means, with respect to any period, the Net
      Income of AREP and the Guarantors for such period plus, without
      duplication:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      provision for taxes based on income or profits of AREP and the Guarantors or
      any
      payments of Tax Amounts by AREP for such period, to the extent that such
      provision for taxes or such payments of Tax Amounts were deducted in computing
      such Net Income of AREP or any Guarantor; plus</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the Fixed Charges of AREP or any Guarantor for such period, to the extent that
      such Fixed Charges of AREP and such Guarantor were deducted in computing such
      Net Income of AREP and such Guarantor; plus</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      depreciation, amortization (including amortization of intangibles but excluding
      amortization of prepaid cash expenses that were paid in a prior period) and
      other non-cash expenses (excluding any such non-cash expense to the extent
      that
      it represents an accrual of or reserve for cash expenses in any future period
      or
      amortization of a prepaid cash expense that was paid in a prior period) of
      AREP
      and any Guarantor for such period to the extent that such depreciation,
      amortization and other non-cash expenses were deducted in computing such Net
      Income of AREP and any Guarantor; minus</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      non-cash items increasing such Net Income of AREP and any Guarantor for such
      period, other than the accrual of revenue in the ordinary course of
      business,</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">in each
      case, consolidating such amounts for AREP and any Guarantor but excluding any
      net income, provision for taxes, fixed charges, depreciation, amortization
      or
      other amounts of any of the Subsidiaries of AREP (other than any Guarantor)
      and
      otherwise determined in accordance with GAAP; provided, further, that the Net
      Income of AREP and any Guarantor shall include income from investments or
      Subsidiaries of AREP (other than any Guarantor) but only to the extent such
      income is realized in Cash Equivalents by AREP or any Guarantor.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Change
      of
      Control&#8221;</i> means the occurrence of any of the following:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      the sale, lease, transfer, conveyance or other disposition by AREP or AREH
      (other than by way of merger or consolidation), in one or a series of related
      transactions, of all or substantially all of the properties or assets of AREP
      or
      AREH to any &#8220;person&#8221; (as that term is used in Section 13(d) of the Exchange Act)
      other than the Principal or a Related Party; provided, however, that (x) if
      AREP
      or AREH receives consideration in Cash Equivalents and marketable securities
      with an aggregate Fair Market Value determined at the time of the execution
      of
      each relevant agreement of at least $1.0&#160;billion for such sale, lease,
      transfer, conveyance or other disposition of properties or assets, then such
      transaction shall not be deemed a Change of Control and (y) any sale,
      assignment, transfer or other disposition of Cash Equivalents, including,
      without limitation, any investment or capital contribution of Cash Equivalents
      or purchase of property, assets or Capital Stock with Cash Equivalents, will
      not
      constitute a sale, assignment, transfer, conveyance or other disposition of
      all
      or substantially all of the properties or assets for purposes of this clause
      (1);</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the adoption of a plan relating to the liquidation or dissolution of AREP;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      the consummation of any transaction (including, without limitation, any merger
      or consolidation), the result of which is that any &#8220;person&#8221; (as defined above),
      other than the Principal or the Related Parties, becomes the Beneficial Owner,
      directly or indirectly, of more than 50% of the Voting Stock of a Controlling
      Entity of AREP, measured by voting power rather than number of shares;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      the first day on which a majority of the members of the Board of Directors
      of
      the Controlling Entity are not Continuing Directors; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      for so long as AREP is a partnership, upon any general partner of AREP ceasing
      to be an Affiliate of the Principal or a Related Party.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Change
      of
      Control Offer&#8221;</i> has the meaning assigned to that term in the indenture
      governing the notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Consolidated
      Net Income&#8221;</i> means, with respect to any specified Person for any period, the
      aggregate of net income (loss) of such Person, on a consolidated basis with
      its
      Subsidiaries, determined in accordance with GAAP and before any reduction in
      respect of preferred stock dividends; provided that:</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">63</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>

    <div style="PADDING-LEFT: 18pt; TEXT-INDENT: 18pt">(1)
      the Net Income of any Person that is accounted for by the equity method of
      accounting or that is a Subsidiary will be included only to the extent of the
      amount of dividends or similar distributions paid in cash to the specified
      Person or a Subsidiary of the Person;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the Net Income of any of its Subsidiaries will be excluded to the extent that
      the declaration or payment of dividends or similar distributions by that
      Subsidiary of that Net Income is not at the date of determination permitted
      without any prior governmental approval (that has not been obtained) or,
      directly or indirectly, by operation of the terms of its charter or any
      agreement, instrument, judgment, decree, order, statute, rule or governmental
      regulation applicable to that Subsidiary or its stockholders; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      the cumulative effect of a change in accounting principles will be
      excluded.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Continuing
      Directors&#8221;</i> means, as of any date of determination, any member of the Board
      of Directors of AREP who:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      was a member of such Board of Directors on the date of the indenture; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      was nominated for election or elected to such Board of Directors with the
      approval of the Principal or any of the Related Parties or with the approval
      of
      a majority of the Continuing Directors who were members of such Board of
      Directors at the time of such nomination or election.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Control&#8221;</i>
      means the possession, directly or indirectly, of the power to direct or cause
      the direction of management and policies of a Person, whether through the
      ownership of Voting Stock, by agreement or otherwise.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Controlling
      Entity&#8221;</i> means (1) for so long as AREP is a partnership, any general partner
      of AREP, (2) if AREP is a limited liability company, any managing member of
      AREP
      or (3) if AREP is a corporation, AREP.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Default&#8221;</i>
      means any event that is, or with the passage of time or the giving of notice
      or
      both would be, an Event of Default.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Disqualified
      Stock&#8221;</i> means any Capital Stock that, by its terms (or by the terms of any
      security into which it is convertible, or for which it is exchangeable, in
      each
      case, at the option of the holder of the Capital Stock), or upon the happening
      of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
      obligation or otherwise, or redeemable at the option of the holder of the
      Capital Stock, in whole or in part, on or prior to the date that is 91 days
      after the date on which the notes mature. Notwithstanding the preceding
      sentence, any Capital Stock that would constitute Disqualified Stock solely
      because the holders of the Capital Stock have the right to require AREP or
      any
      Guarantor to repurchase such Capital Stock upon the occurrence of a change
      of
      control, event of loss, an asset sale or other special redemption event will
      not
      constitute Disqualified Stock if the terms of such Capital Stock provide that
      AREP or any Guarantor may not repurchase or redeem any such Capital Stock
      pursuant to such provisions unless such repurchase or redemption complies with
      the covenant described above under the caption &#8220;&#8212; Certain Covenants &#8212; Restricted
      Payments&#8221; or where the funds to pay for such repurchase was from the net cash
      proceeds of such Capital Stock and such net cash proceeds was set aside in
      a
      separate account to fund such repurchase. Furthermore, any Capital Stock that
      would constitute Disqualified Stock solely because the holders of the Capital
      Stock have the right to require AREP or any Guarantor to redeem such Capital
      Stock, including, without limitation, upon maturity will not constitute
      Disqualified Stock if the terms of such Capital Stock provide that AREP or
      any
      Guarantor may redeem such Capital Stock for other Capital Stock that is not
      Disqualified Stock. The amount of Disqualified Stock deemed to be outstanding
      at
      any time for purposes of the indenture will be the maximum amount that AREP
      and
      its Subsidiaries (including any Guarantor) may become obligated to pay upon
      the
      maturity of, or pursuant to any mandatory redemption provisions of, such
      Disqualified Stock, exclusive of accrued dividends. For the avoidance of doubt,
      and by way of example, the Preferred Units, as in effect on the date of the
      indenture, do not constitute Disqualified Stock.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Equity
      Interests&#8221;</i> means Capital Stock and all warrants, options or other rights to
      acquire Capital Stock (but excluding any debt security that is convertible
      into,
      or exchangeable for, Capital Stock).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Equity
      Offering&#8221;</i> means an offer and sale of Capital Stock (other than Disqualified
      Stock) of AREP (other than an offer and sale relating to equity securities
      issuable under any employee benefit plan of AREP) or a capital contribution
      in
      respect of Capital Stock (other than Disqualified Stock) of AREP.</div>
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    <div style="TEXT-INDENT: 18pt">
<i>&#8220;Existing
      Indebtedness&#8221;</i> means up to $394.4&#160;million in aggregate principal amount
      of Indebtedness of AREP and any Guarantor, in existence on the Issuance Date,
      until such amounts are repaid.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Existing
      Notes&#8221;</i> means the 7 1/8% Senior Notes due 2013 issued and sold by the Issuers
      on February&#160;1, 2005.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Fair
      Market Value&#8221;</i> means the value that would be paid by a willing buyer to an
      unaffiliated willing seller in a transaction not involving distress or necessity
      of either party, determined in good faith by the Board of Directors of AREP
      (unless otherwise provided in the indenture).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt"><i>&#8220;Fixed
      Charge Coverage Ratio of AREP and the Guarantors&#8221;</i> means the ratio of the
      Cash Flow of AREP and the Guarantors for such period to the Fixed Charges of
      AREP and the Guarantors for such period. In the event that AREP, the Guarantors
      or any Guarantor incurs, assumes, guarantees, repays, repurchases, redeems,
      defeases or otherwise discharges any Indebtedness (other than ordinary working
      capital borrowings) or issues, repurchases or redeems preferred stock subsequent
      to the commencement of the period for which the Fixed Charge Coverage Ratio
      of
      AREP and the Guarantors is being calculated and on or prior to the Quarterly
      Determination Date for which the calculation of the Fixed Charge Coverage Ratio
      of AREP and the Guarantors is being made (the &#8220;Calculation Date&#8221;), then the
      Fixed Charge Coverage Ratio of AREP and the Guarantors will be calculated giving
      pro forma effect to such incurrence, assumption, Guarantee, repayment,
      repurchase, redemption, defeasance or other discharge of Indebtedness, or such
      issuance, repurchase or redemption of preferred stock, and the use of the
      proceeds therefrom, as if the same had occurred at the beginning of the
      applicable four-quarter reference period.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition, for purposes of calculating the Fixed Charge Coverage Ratio:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      acquisitions that have been made by the specified Person, including through
      mergers or consolidations, or any Person acquired by the specified Person,
      and
      including any related financing transactions, during the four-quarter reference
      period or subsequent to such reference period and on or prior to the Calculation
      Date will be given pro forma effect (in accordance with Regulation S-X under
      the
      Securities Act) as if they had occurred on the first day of the four-quarter
      reference period;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the Cash Flow of AREP and the Guarantors attributable to discontinued
      operations, as determined in accordance with GAAP, and operations or businesses
      (and ownership interests therein) disposed of prior to the Calculation Date,
      will be excluded;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      the Fixed Charges of AREP and the Guarantors attributable to discontinued
      operations, as determined in accordance with GAAP, and operations or businesses
      (and ownership interests therein) disposed of prior to the Calculation Date,
      will be excluded, but only to the extent that such Fixed Charges of AREP and
      the
      Guarantors are equal to or less than the Cash Flow of AREP and the Guarantors
      from the related discontinued operation excluded under clause (3) for such
      period; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      if any Indebtedness bears a floating rate of interest, the interest expense
      on
      such Indebtedness will be calculated as if the rate in effect on the Calculation
      Date had been the applicable rate for the entire period (taking into account
      any
      Hedging Obligation applicable to such Indebtedness if such Hedging Obligation
      has a remaining term as at the Calculation Date in excess of 12 months).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; FONT-FAMILY: Times New (W1)"><font style="FONT-FAMILY: Times New (W1)"><i>&#8220;Fixed
      Charges of AREP and the
      Guarantors&#8221;</i></font> means, with respect to any period, the sum, without
      duplication,&#160;of:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><font style="FONT-FAMILY: Times New Roman">(1)
      the interest expense of AREP, and any
      Guarantor for such period, whether paid or accrued, including, without
      limitation, amortization of debt issuance costs and original issue discount,
      non-cash interest payments, the interest component of any deferred payment
      obligations, the interest component of all payments associated with Capital
      Lease Obligations, commissions, discounts and other fees and charges incurred
      in
      respect of letter of credit or bankers&#8217; acceptance financings, and net of the
      effect of all payments made or received pursuant to Hedging Obligations in
      respect of interest rates; plus</font></div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      the interest expense of AREP and any Guarantor that was capitalized during
      such
      period; plus</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt; FONT-FAMILY: Times New (W1)"><font style="FONT-FAMILY: Times New (W1)">(3)
      any interest on Indebtedness of another
      Person that is guaranteed by AREP or any Guarantor (other than Bad Boy
      Guarantees unless such Bad Boy Guarantee is called upon) or secured by a Lien
      on
      assets of AREP or any additional Guarantor, whether or not such Guarantee or
      Lien is called upon; provided that for purposes of calculating interest with
      respect to Indebtedness that is Guaranteed or secured by a Lien, the principal
      amount of Indebtedness will be calculated in accordance with the last two
      paragraphs of the definition of Indebtedness; plus</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
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    <div style="MARGIN: 0pt"><br></div>
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</div>
    <div style="PADDING-LEFT: 18pt; TEXT-INDENT: 18pt">(4)
      the product of (a) all dividends, whether paid or accrued and whether or not
      in
      cash, on any series of preferred equity of AREP, other than dividends on
      preferred stock to the extent payable in Equity Interests of AREP (other than
      Disqualified Stock) or dividends on preferred equity payable to AREP, times
      (b)
      a fraction, the numerator of which is one and the denominator of which is one
      minus the then current combined federal, state and local statutory income tax
      rate of AREP (however, for so long as AREP is a partnership or otherwise a
      pass-through entity for federal income tax purposes, the combined federal,
      state
      and local income tax rate shall be the rate that was utilized to calculate
      the
      Tax Amount of AREP to the extent that the Tax Amount was actually distributed
      with respect to such period (and if less than the Tax Amount is distributed,
      such rate shall be proportionately reduced) and if no Tax Amount was actually
      distributed with respect to such period, such combined federal, state and local
      income tax rate shall be zero), expressed as a decimal; provided that this
      clause (4) will not include any Preferred Unit Distribution paid in additional
      Preferred Units,</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">in each
      case, determined on a consolidated basis between AREP and any Guarantor but
      on a
      non-consolidated basis with the Subsidiaries of AREP (other than any Guarantor)
      and otherwise in accordance with GAAP.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;GAAP&#8221;</i>
      means generally accepted accounting principles in the United States set forth
      in
      the statements and pronouncements of the Financial Accounting Standards Board or
      in such other statements by such other entity as have been approved by a
      significant segment of the accounting profession, which are in effect on the
      Issuance Date. For the purposes of the indenture, the term &#8220;consolidated&#8221; with
      respect to any Person shall mean such Person consolidated with its
      Subsidiaries.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Gaming
      Authority&#8221;</i> means any agency, authority, board, bureau, commission,
      department, office or instrumentality of any nature whatsoever of the United
      States or other national government, any state, province or any city or other
      political subdivision, including, without limitation, the State of Nevada or
      the
      State of New Jersey, whether now or hereafter existing, or any officer or
      official thereof and any other agency with authority thereof to regulate any
      gaming operation (or proposed gaming operation) owned, managed or operated
      by
      the Principal, its Related Parties, the Issuers or any of their respective
      Subsidiaries or Affiliates.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Gaming
      Law&#8221;</i> means any gaming law or regulation of any jurisdiction or jurisdictions
      to which the Issuers or any of their Subsidiaries (including AREH) is, or may
      at
      any time after the issue date be, subject.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Government
      Instrumentality&#8221;</i> means any national, state or local government (whether
      domestic or foreign), any political subdivision thereof or any other
      governmental, quasi-governmental, judicial, public or statutory instrumentality,
      authority, body, agency, court, tribunal, commission, bureau or entity or any
      arbitrator with authority to bind a party at law.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Government
      Securities&#8221;</i> means securities that are (1) direct obligations of the United
      States of America for the timely payment of which its full faith and credit
      is
      pledged or (2) obligations of a Person controlled or supervised by and acting
      as
      an agency or instrumentality of the United States of America the timely payment
      of which is unconditionally guaranteed as a full faith and credit obligation
      by
      the United States of America, which, in either case, are not callable or
      redeemable at the option of the issuer thereof, and shall also include a
      depository receipt issued by a bank (as defined in Section 3(a)(2) of the
      Securities Act), as custodian with respect to any such Government Security
      or a
      specific payment of principal of or interest on any such Government Security
      held by such custodian for the account of the holder of such depository receipt;
      provided, that (except as required by law) such custodian is not authorized
      to
      make any deduction from the amount payable to the holder of such depository
      receipt from any amount received by the custodian in respect of the Government
      Security or the specific payment of principal of or interest on the Government
      Security evidenced by such depository receipt.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Guarantee&#8221;</i>
      means a guarantee (other than by endorsement of negotiable instruments for
      collection in the ordinary course of business), direct or indirect, in any
      manner (including, without limitation, by way of a pledge of assets or through
      letters of credit or reimbursement agreements in respect thereof), of all or
      any
      part of any Indebtedness (whether arising by virtue of partnership arrangements,
      or by agreements to keep-well, to purchase assets, goods, securities or
      services, to take or pay or to maintain financial statement conditions or
      otherwise).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Guarantor&#8221;</i>
      means any Subsidiary of AREP (initially only AREH) that executes a Note
      Guarantee in accordance with the provisions of the indenture, and their
      respective successors and assigns, in each case, until the Note Guarantee of
      such Person has been released in accordance with the provisions of the
      indenture.</div>
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    <div style="MARGIN: 0pt" align="center">66</div>
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<div style="TEXT-INDENT: 18pt">
</div>
<i>&#8220;Hedging
      Obligations&#8221;</i> means, with respect to any specified Person, the obligations of
      such Person under:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      interest rate swap agreements (whether from fixed to floating or from floating
      to fixed), interest rate cap agreements and interest rate collar
      agreements;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      other agreements or arrangements designed to manage interest rates or interest
      rate risk; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      other agreements or arrangements designed to protect such Person against
      fluctuations in currency exchange rates or commodity prices.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Indebtedness&#8221;</i>
      means, with respect to any specified Person, any indebtedness of such Person
      (excluding accrued expenses and trade payables), whether or not
      contingent:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      in respect of borrowed money;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      evidenced by bonds, notes, debentures or similar instruments or letters of
      credit (or reimbursement agreements in respect thereof);</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      in respect of banker&#8217;s acceptances;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      representing Capital Lease Obligations;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      representing the balance deferred and unpaid of the purchase price of any
      property or services due more than six months after such property is acquired
      or
      such services are completed; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(6)
      representing any Hedging Obligations,</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">if and
      to
      the extent any of the preceding items (other than letters of credit and Hedging
      Obligations) would appear as a liability upon a balance sheet of the specified
      Person prepared in accordance with GAAP. In addition, the term &#8220;Indebtedness&#8221;
includes all Indebtedness of others secured by a Lien on any asset of the
      specified Person (whether or not such Indebtedness is assumed by the specified
      Person) and, to the extent not otherwise included, the Guarantee by the
      specified Person of any Indebtedness of any other Person.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      amount of any Indebtedness outstanding as of any date attributable to a
      Guarantee shall be the maximum principal amount guaranteed by such specified
      Person as of such date.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      amount of any Indebtedness outstanding as of any date shall be (a) the accreted
      value thereof, in the case of any Indebtedness with original issue discount,
      (b)
      the principal amount thereof, together with any interest thereon that is more
      than 30 days past due, in the case of any other Indebtedness and (c) in respect
      of Indebtedness of another Person secured by a Lien on the assets of the
      specified Person, the lesser of (x) the Fair Market Value of such assets at
      the
      date of determination and (y) the amount of the Indebtedness of the other Person
      to the extent so secured. Notwithstanding anything in the indenture to the
      contrary, Indebtedness of AREP, AREH or any Note Guarantor shall not include
      any
      Indebtedness that has been either satisfied and discharged or defeased through
      covenant defeasance or legal defeasance.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Issuance
      Date&#8221;</i> means the closing date for the sale and original issuance of the
      Existing Notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Issuers&#8221;</i>
      means AREP and AREP Finance, collectively.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Lien&#8221;</i>
      means, with respect to any asset, any mortgage, lien, pledge, charge, security
      interest or encumbrance of any kind in respect of such asset, whether or not
      filed, recorded or otherwise perfected under applicable law, including any
      conditional sale or other title retention agreement, any lease in the nature
      thereof, any option or other agreement to sell or give a security interest
      in
      and any filing of or agreement to give any financing statement under the Uniform
      Commercial Code (or equivalent statutes) of any jurisdiction.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Liquidated
      Damages&#8221;</i> means all liquidated damages then owing pursuant to the
      registration rights agreement.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Net
      Income&#8221;</i> means, with respect to any specified Person for any four consecutive
      fiscal quarter period, the net income (loss) of such Person determined in
      accordance with GAAP and before any reduction in respect of preferred stock
      dividends.</div>
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    <div style="MARGIN: 0pt" align="center">67</div>
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<div style="TEXT-INDENT: 18pt">
</div>

<i>&#8220;Note
      Guarantee&#8221;</i> means the Guarantee by any Subsidiary of AREP of the Issuers&#8217;
obligations under the indenture and the notes, executed pursuant to the
      provisions of the indenture which initially will only be by AREH.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Notes&#8221;</i>
      means AREP&#8217;s 7 1/8% senior notes issued under the indenture, including any
      Additional Notes issued.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Obligations&#8221;</i>
      means any principal, interest, penalties, fees, indemnifications,
      reimbursements, damages and other liabilities payable under the documentation
      governing any Indebtedness.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Officer&#8221;</i>
      means with respect to any Person, the Chairman of the Board, the Chief Executive
      Officer, the President, the Chief Operating Officer, the Chief Financial
      Officer, the Treasurer, an Assistant Treasurer, the Controller, the Secretary
      or
      any Vice President of such Person.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Officers&#8217;
      Certificate&#8221;</i> means a certificate signed on behalf of API or AREP Finance by
      two Officers (or if a limited liability company, two Officers of the managing
      member of such limited liability company) of API or AREP Finance, one of whom
      must be the principal executive officer, the principal financial officer, the
      treasurer or the principal accounting officer of API or AREP Finance that meets
      the requirements set forth in the indenture.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Other
      Liquidated Damages&#8221;</i> means liquidated damages arising from a registration
      default under a registration rights agreement with respect to the registration
      of subordinated Indebtedness permitted to be incurred under the indenture.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Partners&#8217;
      Equity&#8221;</i> with respect to any Person means as of any date, the partners&#8217;
equity as of such date shown on the consolidated balance sheet of such
      Person
      and its Subsidiaries or if such Person is not a partnership, the comparable
      line-item on a balance sheet, each prepared in accordance with GAAP.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Permitted
      Refinancing Indebtedness&#8221;</i> means any Indebtedness of AREP or any Guarantor
      issued in exchange for, or the net proceeds of which are used to renew, refund,
      refinance, replace, defease or discharge other Indebtedness of AREP or any
      Guarantor (other than intercompany Indebtedness); provided that:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      the principal amount (or accreted value, if applicable) of such Permitted
      Refinancing Indebtedness does not exceed the principal amount (or accreted
      value, if applicable) of the Indebtedness renewed, refunded, refinanced,
      replaced, defeased or discharged (plus all accrued interest on the Indebtedness
      and the amount of all fees and expenses, including premiums, and Other
      Liquidated Damages, incurred in connection therewith);</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      in the case of any Indebtedness other than notes redeemed in accordance with
&#8220;&#8212;
Mandatory Disposition Pursuant to Gaming Laws,&#8221; such Permitted Refinancing
      Indebtedness has a final maturity date later than the final maturity date of,
      and has a Weighted Average Life to Maturity equal to or greater than the
      Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded,
      refinanced, replaced, defeased or discharged; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      if the Indebtedness being renewed, refunded, refinanced, replaced, defeased
      or
      discharged is subordinated in right of payment to the notes, such Permitted
      Refinancing Indebtedness has a final maturity date later than the final maturity
      date of, and is subordinated in right of payment to, the notes on terms at
      least
      as favorable to the holders of notes as those contained in the documentation
      governing the Indebtedness being renewed, refunded, refinanced, replaced,
      defeased or discharged.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Person&#8221;</i>
      means any individual, corporation, partnership, limited liability company,
      joint
      venture, association, joint-stock company, trust, unincorporated organization,
      government or any agency or political subdivision thereof or any other
      entity.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Preferred
      Stock&#8221;</i> means any Equity Interest with preferential right of payment of
      dividends or upon liquidation, dissolution, or winding up.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Preferred
      Units&#8221;</i> means AREP&#8217;s 5% Cumulative Pay-in-Kind Redeemable Preferred Units
      payable on or before March&#160;31, 2010.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Preferred
      Unit Distribution&#8221;</i> means the scheduled annual Preferred Unit distribution,
      payable on March&#160;31 of each year in additional Preferred Units at the rate
      of 5% of the liquidation preference of $10.00 per Preferred Unit.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Principal&#8221;</i>
      means Carl Icahn.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">68</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>
<div style="TEXT-INDENT: 18pt">
</div>
<i>&#8220;Principal
      Property&#8221;</i> of a specified Person means any property, assets or revenue of
      such Person now owned or hereafter acquired.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Quarterly
      Determination Date&#8221;</i> means, in connection with AREP&#8217;s first, second and third
      fiscal quarters, the earlier of (i) the date AREP would have been required
      to
      file a quarterly report with the SEC on Form 10-Q if AREP were required to
      file
      such reports and (ii) the date AREP files its quarterly report with the SEC
      on
      Form 10-Q. In connection with AREP&#8217;s fourth fiscal quarter, the earlier of (i)
      the date AREP would have been required to file an annual report with the SEC
      on
      Form 10-K if AREP were required to file such a report and (ii) the date AREP
      files its annual report with the SEC on Form 10-K.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; FONT-FAMILY: Times New (W1)"><font style="FONT-FAMILY: Times New (W1)"><i>&#8220;Related
      Parties&#8221;</i></font> means (1)
      Carl Icahn, any spouse and any child, stepchild, sibling or descendant of Carl
      Icahn, (2) any estate of Carl Icahn or any person under clause (1), (3) any
      person who receives a beneficial interest in any estate under clause (2) to
      the
      extent of such interest, (4) any executor, personal administrator or trustee
      who
      holds such beneficial interest in AREP for the benefit of, or as fiduciary
      for,
      any person under clauses (1), (2) or (3) to the extent of such interest and
      (5)
      any corporation, partnership, limited liability company, trust, or similar
      entity, directly or indirectly owned or Controlled by Carl Icahn or any other
      person or persons identified in clauses (1), (2) or (3).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><font style="FONT-FAMILY: Times New Roman"><i>&#8220;SEC&#8221;</i></font>
      means the United States
      Securities and Exchange Commission.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Secured
      Indebtedness&#8221;</i> of any specified Person means any Indebtedness secured by a
      Lien upon the property of such Person.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Securities
      Act&#8221;</i> means the Securities Act of 1933, as amended.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Significant
      Subsidiary&#8221;</i> means any Subsidiary which would be a &#8220;significant subsidiary&#8221;
as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant
      to
      the Securities Act, as such regulation is in effect on the Issuance Date.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Stated
      Maturity&#8221;</i> means, with respect to any installment of interest or principal on
      any series of Indebtedness, the date on which such payment of interest or
      principal was scheduled to be paid in the original documentation governing
      such
      Indebtedness, and shall not include any contingent obligations to repay, redeem
      or repurchase any such interest, accreted value, or principal prior to the
      date
      originally scheduled for the payment or accretion thereof.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Subordinated
      Indebtedness&#8221;</i> means any Indebtedness that by its terms is expressly
      subordinated in right of payment in any respect (either in the payment of
      principal or interest) to the payment of principal, Liquidated Damages or
      interest on the notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Subsidiary&#8221;</i>
      means, with respect to any specified Person:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      any corporation, association or other business entity of which more than 50%
      of
      the total Voting Stock is at the time owned or Controlled, directly or
      indirectly, by that Person or one or more of the other Subsidiaries of that
      Person (or a combination thereof); and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      any partnership (a) the sole general partner or the managing general partner
      of
      which is such Person or a Subsidiary of such Person or (b) the only general
      partners of which are that Person or one or more Subsidiaries of that Person
      (or
      any combination thereof).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      avoidance of doubt, AREH will be deemed to be a Subsidiary of AREP so long
      as
      AREH remains a Guarantor.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Tangible
      Net Worth&#8221;</i> of any specified Person as of any date means, the total
      shareholders&#8217; equity (or if such Person were not a corporation, the equivalent
      account) of such Person and its Subsidiaries on a consolidated basis determined
      in conformity with GAAP less any and all goodwill and other intangible assets
      reflected on the consolidated balance sheet of such Person as of the last day
      of
      the fiscal quarter most recently completed before the date of determination
      for
      which financial statements are then available, but taking into account any
      change in total shareholders&#8217; equity (or the equivalent account) as a result of
      any (x) Restricted Payments made, (y) asset sales or (z) contributions to equity
      or from the issuance or sale of Equity Interests (excluding Disqualified Stock)
      or from the exchange or conversion (other than to Disqualified Stock) of
      Disqualified Stock or debt securities, completed since such fiscal quarter
      end.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">69</div>
    <div style="MARGIN: 0pt"><br></div>
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</div>
<div style="TEXT-INDENT: 18pt">
</div>
<i>&#8220;Tax
      Amount&#8221;</i> means, for any period, the combined federal, state and local income
      taxes, including estimated taxes, that would be payable by AREP if it were
      a
      Delaware corporation filing separate tax returns with respect to its Taxable
      Income for such period and owned 100% of AREH; provided, that in determining
      the
      Tax Amount, the effect thereon of any net operating loss carryforwards or other
      carryforwards or tax attributes, such as alternative minimum tax carryforwards,
      that would have arisen if AREP were a Delaware corporation shall be taken into
      account; provided, further that (i) if there is an adjustment in the amount
      of
      the Taxable Income for any period, an appropriate positive or negative
      adjustment shall be made in the Tax Amount, and if the Tax Amount is negative,
      then the Tax Amount for succeeding periods shall be reduced to take into account
      such negative amount until such negative amount is reduced to zero and (ii)
      any
      Tax Amount other than amounts relating to estimated taxes shall be computed
      by a
      nationally recognized accounting firm (but, including in any event, AREP&#8217;s
      auditors). Notwithstanding anything to the contrary, the Tax Amount shall not
      include taxes resulting from AREP&#8217;s change in the status to a corporation for
      tax purposes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Taxable
      Income&#8221;</i> means, for any period, the taxable income or loss of AREP for such
      period for federal income tax purposes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Total
      Unencumbered Assets&#8221;</i> means, as of any Quarterly Determination Date, the book
      value of all of the assets of AREP and any Guarantor (including, without
      limitation, the Capital Stock of their Subsidiaries, but excluding goodwill
      and
      intangibles) that do not secure, by a Lien, any portion of any Indebtedness
      (other than assets secured by a Lien in favor of the notes and such assets
      are
      not secured by a Lien in favor of any other Indebtedness) as of such date
      (determined on a consolidated basis between AREP and any Guarantor but not
      on a
      consolidated basis with their Subsidiaries and otherwise in accordance with
      GAAP).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Unsecured
      Indebtedness&#8221;</i> of AREP, AREH and any additional Guarantor means any
      Indebtedness of such Person that is not Secured Indebtedness.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Voting
      Stock&#8221;</i> means, with respect to any Person that is (a) a corporation, any
      class or series of capital stock of such Person that is ordinarily entitled
      to
      vote in the election of directors thereof at a meeting of stockholders called
      for such purpose, without the occurrence of any additional event or contingency,
      (b) a limited liability company, membership interests entitled to manage, or
      to
      elect or appoint the Persons that will manage the operations or business of
      the
      limited liability company, or (c) a partnership, partnership interests entitled
      to elect or replace the general partner thereof.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>&#8220;Weighted
      Average Life to Maturity&#8221;</i> means, when applied to any Indebtedness or
      Disqualified Stock, as the case may be, at any date, the number of years
      (calculated to the nearest one-twelfth) obtained by dividing (1) the sum of
      the
      products obtained by multiplying (a) the amount of each then remaining
      installment, sinking fund, serial maturity or other required payments of
      principal or liquidation preference, including payment at final maturity, in
      respect thereof, by (b) the number of years (calculated to the nearest
      one-twelfth) that will elapse between such date and the making of such payment,
      by (2) the then outstanding principal amount or liquidation preference, as
      applicable, of such Indebtedness or Disqualified Stock, as the case may
      be.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">70</div>
    <div style="MARGIN: 0pt"><br></div>
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<strong><a name="10"></a>CERTAIN
  MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      following general discussion summarizes certain material U.S. federal income
      tax
      consequences that apply to beneficial owners of the private notes who:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      acquired the private notes at their original issue price for cash,</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      exchange the private notes for new notes in this exchange offer, and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      held the private notes and hold the new notes as &#8220;capital assets&#8221; (generally,
      for investment) as defined in the Code.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">This
      summary, however, does not consider state, local or foreign tax laws. In
      addition, it does not include all of the rules which may affect the U.S. tax
      treatment of your investment in the notes. For example, special rules not
      discussed here may apply to you if you are:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">A
      broker-dealer, a dealer in securities or
      a financial institution;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">An
      S corporation;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">A
      bank;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">A
      thrift;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">An
      insurance company;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">A
      tax-exempt organization;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">A
      partnership or other pass-through
      entity;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">Subject
      to the alternative minimum tax
      provisions of the Code;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">Holding
      the private notes or the new notes
      as part of a hedge, straddle or other risk reduction or constructive sale
      transaction;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">A
      person with a &#8220;functional currency&#8221; other
      than the U.S. dollar; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">A
      U.S. expatriate.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If you
      are a partner in a partnership which holds the new notes, you should consult
      your own tax advisor regarding special rules that may apply.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">This
      summary is based on the Code and applicable Treasury Regulations, rulings,
      administrative pronouncements and decisions as of the date hereof, all of which
      are subject to change or differing interpretations at any time with possible
      retroactive effect. We have not sought and will not seek any rulings from the
      Internal Revenue Service, or the IRS, with respect to the statements made and
      the conclusions reached in this summary, and there can be no assurance that
      the
      IRS will agree with such statements and conclusions.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><strong>Each
      holder is urged to consult his tax advisor regarding the specific federal,
      state, local, and foreign income and other tax considerations of participating
      in this exchange offer and holding the new notes.</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Exchange of Private
      Notes for New Notes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      exchange of the private notes for the new notes pursuant to this exchange offer
      should not be a taxable event for U.S. federal income tax purposes. Accordingly,
      holders participating in this exchange offer should not recognize any income,
      gain or loss in connection with the exchange. In addition, immediately after
      the
      exchange, any such holder should have the same adjusted tax basis and holding
      period in the new notes as it had in the private notes, immediately before
      the
      exchange.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Consequences of
      Holding the New Notes</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>U.S.
      Holders</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">If you
      are a &#8220;U.S. Holder,&#8221; as defined below, this section applies to you. Otherwise,
      the section &#8220;Non-U.S. Holders&#8221; applies to you.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">71</div>
    <div style="MARGIN: 0pt"><br></div>
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<strong>Definition
      of U.S. Holder</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">You are
      a
&#8220;U.S. Holder&#8221; if you are the beneficial owner of a new note and you are, for
      U.S. federal income tax purposes:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">an
      individual who is a citizen or resident
      of the United States;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">a
      corporation or an entity, treated as a
      corporation for U.S. federal income tax purposes, created or organized under
      the
      laws of the United States or any political subdivision thereof;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">an
      estate the income of which is subject to
      U.S. federal income tax regardless of its sources; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">a
      trust (i) if a court within the United
      States can exercise primary supervision over the administration of the trust
      and
      one or more U.S. persons has authority to control all substantial decisions
      of
      the trust, or (ii) if the trust was in existence on August&#160;20, 1996, and
      treated as a domestic trust on August&#160;19, 1996, and it has elected to
      continue to be treated as a U.S. person.</font></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Taxation of Stated
      Interest</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Generally,
      you
      must include the interest on the new notes in your gross income as ordinary
      income:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">when
      it accrues, if you use the accrual
      method of accounting for U.S. federal income tax purposes; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">when
      you receive it, if you use the cash
      method of accounting for U.S. federal income tax purposes.</font></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Sale or Other Taxable
      Disposition of the New Notes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">You will
      generally recognize taxable gain or loss on the sale, exchange, redemption,
      retirement or other taxable disposition of a new note. The amount of your gain
      or loss will equal the difference between the amount you receive for the new
      note (in cash or other property, valued at fair market value), except to the
      extent amounts received are attributable to accrued interest on the note, and
      your adjusted tax basis in the new note. Your tax basis in the new note
      generally will equal the price you paid for the private note that was exchanged
      for the new note. Your gain or loss will generally be long-term capital gain
      or
      loss if your holding period for the new note is more than one year at the time
      of the sale, exchange, redemption, retirement or other taxable disposition.
      Otherwise, it will be short-term capital gain or loss. For this purpose, your
      holding period for the new note should include your holding period for the
      private note that was exchanged for the new note. Long-term capital gains
      recognized in years beginning before December&#160;31, 2008 by certain
      non-corporate holders are generally taxed at a maximum rate of 15%. The ability
      to deduct capital losses is subject to limitations. Payments attributable to
      accrued interest which you have not yet included in income will be taxed as
      ordinary interest income.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Information Reporting
      and Backup Withholding</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We will
      report to certain holders of the new notes and to the IRS the amount of any
      interest paid on the new notes in each calendar year and the amounts of tax
      withheld, if any, with respect to such payments. You may be subject to a backup
      withholding tax when you receive interest payments on a new note or proceeds
      upon the sale or other disposition of the new note. Certain holders (including,
      among others, corporations, financial institutions and certain tax-exempt
      organizations) are generally not subject to information reporting or backup
      withholding. In addition, the backup withholding tax will not apply to you
      if
      you provide to us or our paying agent your correct social security or other
      taxpayer identification number, or TIN, in the prescribed manner unless:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">the
      IRS notifies us or our paying agent
      that the TIN you provided is incorrect;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">you
      underreport interest and dividend
      payments that you receive on your tax return and the IRS notifies us or our
      paying agent that withholding is required; or</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">you
      fail, under certain circumstances, to
      certify under penalties of perjury that you are not subject to backup
      withholding.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      backup withholding tax rate is currently 28%. Any amounts withheld from a
      payment to you under the backup withholding rules may be credited against your
      U.S. federal income tax liability, and may entitle you to a refund, provided
      the
      required information is properly furnished to the IRS on a timely basis.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">72</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
</div>
<div style="TEXT-INDENT: 18pt">You
      should consult your tax advisor as to your qualification for exemption from
      backup withholding and the procedures for obtaining such exemption.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Non-U.S.
      Holders</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      following general discussion is limited to the U.S. federal income tax
      consequences relevant to a &#8220;Non-U.S. Holder.&#8221; A &#8220;Non-U.S. Holder&#8221; is any
      beneficial owner of a new note if such owner is, for U.S. federal income tax
      purposes, a nonresident alien, or a corporation, estate, or trust that is not
      a
      U.S. Holder.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Interest</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Portfolio
      Interest Exemption.</i> You will generally not be subject to U.S. federal income
      tax or withholding tax on interest paid or accrued on the new notes if:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">you
      do not own, actually or constructively,
      10% or more of our capital or profits interests;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">you
      are not a controlled foreign
      corporation with respect to which we are a &#8220;related person&#8221; within the meaning
      of Section 864(d)(4) of the Code;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">you
      are not a bank receiving interest
      described in Section 881(c)(3)(A) of the Code;</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">such
      interest is not effectively connected
      with the conduct by you of a trade or business in the United States;
      and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">either
      (i) you represent that you are not a
      United States person for U.S. federal income tax purposes and you provide your
      name and address to us or our paying agent on a properly executed IRS Form
      W-8BEN (or a suitable substitute form) signed under penalties of perjury, or
      (ii) a securities clearing organization, bank, or other financial institution
      that holds customers&#8217; securities in the ordinary course of its business holds
      the new note on your behalf, certifies to us or our paying agent under penalties
      of perjury that it has received IRS Form W-8BEN (or a suitable substitute form)
      from you or from another qualifying financial institution intermediary, and
      provides a copy of the Form W-8BEN (or a suitable substitute form) to us or
      our
      paying agent.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>U.S.
      Federal Income or Withholding Tax If Interest Is Not Portfolio Interest.</i> If
      you do not claim, or do not qualify for, the benefit of the portfolio interest
      exemption described above, you may be subject to a 30% withholding tax on the
      gross amount of interest payments, unless reduced or eliminated by an applicable
      income tax treaty.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">However,
      income from payments or accruals of interest that is effectively connected
      with
      the conduct by you of a trade or business in the United States will be subject
      to U.S. federal income tax on a net basis at a rate applicable to United States
      persons generally (and, if paid to corporate holders, may also be subject to
      a
      branch profits tax at a rate of 30% or lower applicable treaty rate). If
      payments are subject to U.S. federal income tax on a net basis in accordance
      with the rules described in the preceding sentence, such payments will not
      be
      subject to United States withholding tax so long as you provide us or our paying
      agent with a properly executed IRS Form W-8ECI.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Non-U.S.
      Holders should consult any applicable income tax treaties, which may provide
      for
      a lower rate of withholding tax, exemption from or reduction of the branch
      profits tax, or other rules different from those described above. Generally,
      in
      order to claim any treaty benefits you must submit a properly executed IRS
      Form
      W-8BEN.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Reporting.</i>
      We may report annually to the IRS and to you the amount of interest paid to
      you,
      and the tax withheld, if any, with respect to you.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Sale or Other
      Disposition of New Notes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">You will
      generally not be subject to U.S. federal income tax or withholding tax on gain
      recognized on a sale, exchange, redemption, retirement, or other disposition
      of
      a new note unless such gain is effectively connected with the conduct by you
      of
      a trade or business within the United States. Any gain that is effectively
      connected with the conduct by you of a trade or business within the United
      States will be subject to U.S. federal income tax on a net basis at the rates
      generally applicable to U.S. persons as described above.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">73</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
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<strong>Backup
      Withholding and Information Reporting</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Payments
      From U.S. Office.</i> If you receive payment of interest or principal directly
      from us or through the U.S. office of a custodian, nominee, agent or broker,
      you
      may be subject to both backup withholding and information reporting.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">With
      respect to interest payments made on the new notes, however, backup withholding
      and information reporting will not apply if you certify, generally on a Form
      W-8BEN (or Form W-8ECI) or suitable substitute form, that you are not a U.S.
      person in the manner described above under the heading &#8220;Non-U.S. Holders &#8212;
Interest,&#8221; or you otherwise establish an exemption.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Moreover,
      with respect to proceeds received on the sale, exchange, redemption, or other
      disposition of a new note, backup withholding or information reporting generally
      will not apply if you properly provide, generally on Form W-8BEN (or Form
      W-8ECI) or a suitable substitute form, a statement that you are an &#8220;exempt
      foreign person&#8221; for purposes of the broker reporting rules, and other required
      information. If you are not subject to United States federal income or
      withholding tax on the sale or other disposition of a new note, as described
      above under the heading &#8220;Non-U.S. Holders-Interest &#8212; Sale or Other Disposition
      of New Notes,&#8221; you will generally qualify as an &#8220;exempt foreign person&#8221; for
      purposes of the broker reporting rules.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Payments
      From Foreign Office.</i> If payments of principal and interest are made to you
      outside the United States by or through the foreign office of your foreign
      custodian, nominee or other agent, or if you receive the proceeds of the sale
      of
      a new note through a foreign office of a &#8220;broker,&#8221; as defined in the pertinent
      U.S. Treasury Regulations, you will generally not be subject to backup
      withholding or information reporting. You will however, be subject to backup
      withholding and information reporting if the foreign custodian, nominee, agent
      or broker has actual knowledge or reason to know that you are a U.S. person.
      You
      will also be subject to information reporting, but not backup withholding,
      if
      the payment is made by a foreign office of a custodian, nominee, agent or broker
      that has certain relationships to the United States unless the broker has in
      its
      records documentary evidence that you are a Non-U.S. Holder and certain other
      conditions are met.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Refunds.</i>
      Any amounts withheld from a payment to you under the backup withholding rules
      may be credited against your U.S. federal income tax liability and may entitle
      you to a refund, provided the required information is properly furnished to
      the
      IRS on a timely basis.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      information reporting requirements may apply regardless of whether withholding
      is required. Copies of the information returns reporting interest and
      withholding also may be made available to the tax authorities in the country
      in
      which a Non-U.S. Holder is a resident under the provisions of an applicable
      income tax treaty or other agreement.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      preceding summary is for general information only and is not tax advice. Please
      consult your own tax advisor to determine the tax consequences of purchasing,
      holding and disposing of the notes under your particular circumstances.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">74</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

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<strong><a name="11"></a>PLAN
  OF DISTRIBUTION</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Each
      broker-dealer that receives new notes for its own account pursuant to the
      exchange offer must acknowledge that it will deliver a prospectus in connection
      with any resale of such new notes. This prospectus, as it may be amended or
      supplemented from time to time, may be used by a broker-dealer in connection
      with resales of new notes received in exchange for private notes where such
      private notes were acquired as a result of market-making activities or other
      trading activities. We have agreed that, starting on the expiration date and
      ending on the close of business 270 days after the expiration date (or such
      shorter period during which participating broker-dealers are required by law
      to
      deliver such prospectus), we will make this prospectus, as amended or
      supplemented, available to any broker-dealer for use in connection with any
      such
      resale. In addition, until
&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
      200_ all dealers effecting transactions in the new notes may be required to
      deliver a prospectus.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      will not receive any proceeds from any sale of new notes by broker-dealers.
      New
      notes received by broker-dealers for their own account pursuant to the exchange
      offer may be sold from time to time in one or more transactions in the
      over-the-counter market, in negotiated transactions, through the writing of
      options on the new notes or a combination of such methods of resale, at market
      prices prevailing at the time of resale, at prices related to such prevailing
      market prices or negotiated prices. Any such resale may be made directly to
      purchasers or to or through brokers or dealers who may receive compensation
      in
      the form of commissions or concessions from any such broker-dealer and/or the
      purchasers of any such new notes. Any broker-dealer that resells new notes
      that
      were received by it for its own account pursuant to the exchange offer and
      any
      broker or dealer that participates in a distribution of such new notes may
      be
      deemed to be an &#8220;underwriter&#8221; within the meaning of the Securities Act and any
      profit of any such resale of new notes and any commissions or concessions
      received any such persons may be deemed to be underwriting compensation under
      the Securities Act. The letter of transmittal states that by acknowledging
      that
      it will deliver, and by delivering a prospectus, a broker-dealer will not be
      deemed to admit that it is an &#8220;underwriter&#8221; within the meaning of the Securities
      Act.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Furthermore,
      any broker-dealer that acquired any of its private notes directly from us:</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">may
      not rely on the applicable
      interpretation of the staff of the Commission&#8217;s position contained in Exxon
      Capital Holdings Corp., SEC no-action letter (May&#160;13, 1988), Morgan,
      Stanley &amp; Co. Inc., SEC no-action letter (June&#160;5, 1991) and Shearman
&amp; Sterling, SEC no-action letter (July&#160;2, 1983); and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">must
      also be named as a selling noteholder
      in connection with the registration and prospectus delivery requirements of
      the
      Securities Act relating to any resale transaction.</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For a
      period of 270 days after the expiration date, we will promptly send additional
      copies of this prospectus and any amendment or supplement to this prospectus
      to
      any broker-dealer that requests such documents in the letter of transmittal.
      We
      have agreed to pay all expenses incident to the exchange offer (including the
      expenses of one counsel for the holder of the private notes) other than
      commissions or concessions of any brokers or dealers and will indemnify the
      holders of the private notes (including any broker-dealers) against certain
      liabilities, including liabilities under the Securities Act.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">75</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

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<strong><a name="12"></a>LEGAL
  MATTERS</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      validity of the notes offered by this prospectus and certain legal matters
      in
      connection with the exchange offer will be passed upon for us by Proskauer
      Rose
      LLP, New York, New York.</div>

<div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong><a name="13"></a>EXPERTS</strong></div>

<div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The consolidated
  financial statements of American Real Estate Partners, L.P. and Subsidiaries
  as of December&#160;31, 2006 and 2005 and for each of the three years in the
  period ended December&#160;31, 2006 and management&#8217;s assessment of effectiveness
  of internal control over financial reporting as of December 31, 2006, incorporated
  by reference in this prospectus have been audited by Grant Thornton LLP, independent
  registered public accountants, as indicated in their reports with respect thereto,
  (which report on the consolidated financial statements refers to the change
  in accounting for the Partnership&#8217;s investment in ImClone Systems Incorporated
  and Subsidiary from an available for sale security to the equity method) and are included herein in reliance upon
  the authority of said firm as experts in accounting and auditing in giving said
  reports.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      consolidated financial statements of American Real Estate Holdings Limited
      Partnership and Subsidiaries as of December 31, 2006, and for each of the three
      years in the period ended December 31, 2006 included in this prospectus, have
      been audited by Grant Thornton LLP, independent registered public accountants,
      as stated in its report with respect thereto,  (which report on the consolidated financial statements refers to the change
  in accounting for the Partnership&#8217;s investment in ImClone Systems Incorporated
  and Subsidiary from an available for sale security to the equity method) and are included herein
      in
      reliance upon the authority of said firm as experts in accounting and auditing
      in giving said report.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      balance sheet of American Property Investors, Inc., as of December 31, 2006,
      included in this prospectus has been audited by Grant Thornton LLP, independent
      accountants, as stated in its report with respect thereto, and is included
      herein in reliance upon the authority of said firm as experts in accounting
      and
      auditing in giving said report.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      consolidated financial statements of ImClone Systems Incorporated and subsidiary
      as of December 31, 2006 and 2005, and for each of the years in the three-year
      period ended December 31, 2006, have been included and incorporated by reference
      herein in reliance upon the report of KPMG LLP, independent registered public
      accounting firm, included in this registration statement and incorporated by
      reference herein, and upon the authority of said firm as experts in accounting
      and auditing. The audit report covering the December 31, 2006 consolidated
      financial statements refers to the Company&#8217;s adoption of the provisions of
      Statement of Financial Accounting Standards No. 123R, &#8220;Share-Based
      Payment.&#8221;</div>

<div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The consolidated
  financial statements of GB Holdings, Inc. and subsidiaries for the year ended
  December&#160;31, 2004 have been included and incorporated by reference herein
  in reliance upon the report of KPMG LLP, independent registered public accounting
  firm, included and incorporated by reference herein, and upon the authority
  of said firm as experts in accounting and auditing.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      consolidated financial statements and financial statement schedule of Lear
      Corporation as of December&#160;31, 2006 and 2005 and for each of the three
      years in the period ended December&#160;31, 2006 included elsewhere in this
      prospectus have been audited by Ernst &amp; Young LLP, independent registered
      public accounting firm, as set forth in their report thereon appearing elsewhere
      herein and are included in reliance upon such report given on the authority
      of
      such firm as experts in accounting and auditing.</div>

<div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong><a name="14"></a>WHERE
  YOU CAN FIND MORE INFORMATION</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      filed with the SEC a registration statement on Form S-4 under the Securities
      Act. This prospectus is part of the registration statement. This prospectus
      does
      not contain all the information contained in the registration statement because
      we have omitted certain parts of the registration statement in accordance with
      the rules and regulations of the SEC. For further information, we refer you
      to
      the registration statement, which you may read and copy at the public reference
      facilities maintained by the SEC at 100 F Street, N. E. Room 1580, Washington,
      D.C. 20549. You may obtain copies at the prescribed rates from the Public
      Reference Section of the SEC at its principal office in Washington, D.C. You
      may
      call the SEC at 1-800-SEC-0330 for further information about the public </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">76</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
reference
      rooms. The SEC maintains a web site that contains reports, proxy and information
      statements and other information regarding us. You may access the SEC&#8217;s web site
      at http://www.sec.gov.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      are subject to the informational requirements of the Exchange Act. As a result,
      we are required to file reports, proxy statements and other information with
      the
      SEC. These materials can be copied and inspected at the locations described
      above. Copies of these materials can be obtained from the Public Reference
      Section of the SEC at 100 F Street, N. E. Room 1580, Washington, D.C. 20549,
      at
      prescribed rates. Our depositary units are listed on the New York Stock Exchange
      under the symbol &#8220;ACP.&#8221;</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">77</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>
<strong><a name="15"></a>INCORPORATION
  OF CERTAIN DOCUMENTS BY REFERENCE</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The SEC
      allows us to &#8220;incorporate by reference&#8221; the information we file with them, which
      means that we can disclose important information to you by referring you to
      those documents. The information incorporated by reference is considered to
      be
      part of this prospectus, and information that we file later with the SEC will
      automatically update and supersede this information. We incorporate by reference
      the documents listed below, all filings made pursuant to the Exchange Act after
      the date of the initial registration statement and prior to effectiveness of
      the
      registration statement and any other future filings we will make with the SEC
      under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than Current
      Reports on Form 8-K containing disclosure furnished under Items 2.02, 7.01
      or
      8.01 of Form 8-K, unless otherwise indicated therein):</div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">Our
      Annual Report on Form 10-K and Form
      10-K/A, Amendment No. 1 for the fiscal year ended December&#160;31, 2006, filed
      with the SEC on March&#160;6, 2007 and March&#160;16, 2007, respectively (SEC
      File No.&#160;001-09516);</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">Our
      Quarterly Report on Form 10-Q for the
      fiscal quarter ended March&#160;31, 2007, filed with the SEC on May&#160;10,
      2007 (SEC File No. 001-09516); and</font></div>
    <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 36pt; FONT-SIZE: 8pt; MARGIN-BOTTOM: -10pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 10pt; FONT-FAMILY: Symbol"><font style="FONT-FAMILY: Symbol">&#183;</font></div>
    <div style="PADDING-LEFT: 36pt; MARGIN: 0pt"><font style="FONT-FAMILY: Times New Roman">Our
      Current Reports on Form 8-K, filed with
      the SEC on April&#160;3, 2007, April&#160;5, 2007, April&#160;17, 2007,
      April&#160;24, 2007, April&#160;27, 2007 and May&#160;10, 2007 (SEC File No.
      001-09516).</font></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">You may
      request a copy of these filings (not including the exhibits to such documents
      unless the exhibits are specifically incorporated by reference in the
      information contained in this prospectus), at no cost, by writing or telephoning
      us at the following address:</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt" align="center">American
      Real
      Estate Partners, L.P.<br>767 Fifth Avenue, Suite 4700<br>New York, New York
      10153<br>Attn: Chief Financial Officer<br>Telephone requests may be directed to
      (212) 702-4300</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">This
      prospectus is part of a registration statement we filed with the SEC. You should
      rely only on the information or representations provided in this prospectus.
      We
      have authorized no one to provide you with different information. We are not
      making an offer of these securities in any state where the offer is not
      permitted.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">You
      should not assume that the information in this prospectus is accurate as of
      any
      date other than the date on the front of the document.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Statements
      contained in this prospectus as to the contents of any contract or document
      are
      not necessarily complete and in each instance reference is made to the copy
      of
      that contract or document filed as an exhibit to the registration statement
      or
      as an exhibit to another filing, each such statement being qualified in all
      respects by such reference and the exhibits and schedules thereto. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">78</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">


<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"> <strong><a href="#toc">Back to Table of Contents</a></strong></p>

<font style="FONT-FAMILY: Times New Roman" color="#000000"><strong><a name="16"></a><a name="index"></a>INDEX
  TO FINANCIAL STATEMENTS</strong></font></div>
    <div>

  <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">
    <tr>
      <td width="420"> </td>
      <td width="10"> </td>
      <td width="37"> </td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">American
          Real Estate Holdings Limited Partnership</div></td>
      <td valign="bottom" width="13"> <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f2">Report
          of Independent Registered Public Accounting Firm</a></div></td>
      <td valign="bottom" width="13"><a href="#f2">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f2">F-2</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f3">Report
          of Independent Registered Public Accounting Firm</a></div></td>
      <td valign="bottom" width="13"><a href="#f3">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f3">F-3</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f4">Report
          of Independent Registered Public Accounting Firm</a></div></td>
      <td valign="bottom" width="13"><a href="#f4">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f4">F-4</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f5">Consolidated
          Balance Sheets as of December 31, 2006 and 2005</a></div></td>
      <td valign="bottom" width="13"><a href="#f5">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f5">F-5</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: normal"><a href="#f6">Consolidated
          Statements of Operations for the years ended December 31, 2006, 2005
          and 2004</a></div></td>
      <td valign="bottom" width="13"><a href="#f6">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f6">F-6</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f7">Consolidated
          Statements of Changes in Partners&#8217; Equity and Comprehensive Income
          (Loss) for<br>
          the years ended December 31, 2006, 2005 and 2004</a></div></td>
      <td valign="bottom" width="13"><a href="#f7">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f7">F-7</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: normal"><a href="#f8">Consolidated
          Statements of Cash Flows for the years ended December 31, 2006, 2005
          and 2004</a></div></td>
      <td valign="bottom" width="13"><a href="#f8">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f8">F-8</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f10">Notes
          to the Consolidated Financial Statements</a></div></td>
      <td valign="bottom" width="13"><a href="#f10">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f10">F-10</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560">&#160;</td>
      <td valign="bottom" width="13">&#160;</td>
      <td valign="bottom" width="50">&#160;</td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f53">Consolidated
          Balance Sheets as of March 31, 2007 and December 31, 2006</a></div></td>
      <td valign="bottom" width="13"><a href="#f53">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f53">&#160;F-53</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f54">Consolidated
          Statements of Operations for the three months ended March 31, 2007 and
          2006</a></div></td>
      <td valign="bottom" width="13"><a href="#f54">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f54">&#160;F-54</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f55">Consolidated
          Statements of Changes in Partners&#8217; Equity and Comprehensive Income
          for the<br>
          three months ended March 31, 2007</a></div></td>
      <td valign="bottom" width="13"><a href="#f55">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f55">F-55</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: normal"><a href="#f56">Consolidated
          Statements of Cash Flows for the three months ended March 31, 2007 and
          2006</a></div></td>
      <td valign="bottom" width="13"><a href="#f56">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f56">&#160;F-56</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f58">Notes
          to the Consolidated Financial Statements</a></div></td>
      <td valign="bottom" width="13"><a href="#f58">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN: 0pt" align="right"><a href="#f58">&#160;F-58</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560">&#160;</td>
      <td valign="bottom" width="13">&#160;</td>
      <td valign="bottom" width="50">&#160;</td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">American
          Property Investors, Inc.</div></td>
      <td valign="top" width="13">&#160;</td>
      <td valign="top" width="50">&#160;</td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt"><a href="#f81">Independent
          Auditors&#8217; Report</a></div></td>
      <td valign="top" width="13"><a href="#f81">&#160;</a></td>
      <td valign="top" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt" align="right"><a href="#f81">&#160;F-81</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt"><a href="#f82">Balance
          Sheet as of December 31, 2006</a></div></td>
      <td valign="top" width="13"><a href="#f82">&#160;</a></td>
      <td valign="top" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt" align="right"><a href="#f82">&#160;F-82</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt"><a href="#f83">Notes
          to Financial Statements</a></div></td>
      <td valign="top" width="13"><a href="#f83">&#160;</a></td>
      <td valign="top" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt" align="right"><a href="#f83">&#160;F-83</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560">&#160;</td>
      <td valign="top" width="13">&#160;</td>
      <td valign="top" width="50">&#160;</td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">Lear
          Corporation</div></td>
      <td valign="top" width="13">&#160;</td>
      <td valign="top" width="50">&#160;</td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f86">Report
          of Independent Registered Public Accounting Firm</a></div></td>
      <td valign="top" width="13"><a href="#f86">&#160;</a></td>
      <td valign="top" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt" align="right"><a href="#f86">&#160;F-86</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f87">Consolidated
          Balance Sheets as of December 31, 2006 and 2005</a></div></td>
      <td valign="top" width="13"><a href="#f87">&#160;</a></td>
      <td valign="top" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt" align="right"><a href="#f87">&#160;F-87</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f88">Consolidated
          Statements of Operations for the years ended December 31, 2006, 2005
          and 2004&#160;</a></div></td>
      <td valign="top" width="13"><a href="#f88">&#160;</a></td>
      <td valign="top" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt" align="right"><a href="#f88">&#160;F-88</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f89">Consolidated
          Statements of Stockholders&#8217; Equity for the years ended December
          31, 2006, 2005<br>
          and 2004</a></div></td>
      <td valign="top" width="13"><a href="#f89">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt" align="right"><a href="#f89">&#160;F-89</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f90">Consolidated
          Statements of Cash Flows for the years ended December 31, 2006, 2005
          and 2004</a></div></td>
      <td valign="top" width="13"><a href="#f90">&#160;</a></td>
      <td valign="top" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt" align="right"><a href="#f90">&#160;F-90</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f91">Notes
          to the Consolidated Financial Statements</a></div></td>
      <td valign="top" width="13"><a href="#f91">&#160;</a></td>
      <td valign="top" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt" align="right"><a href="#f91">&#160;F-91</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f145">Schedule
          II &#8211; Valuation and Qualifying Accounts</a></div></td>
      <td valign="top" width="13"><a href="#f145">&#160;</a></td>
      <td valign="top" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt" align="right"><a href="#f145">&#160;F-145</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560">&#160;</td>
      <td valign="top" width="13">&#160;</td>
      <td valign="top" width="50">&#160;</td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#146">Condensed
          Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006</a></div></td>
      <td valign="top" width="13"><a href="#146">&#160;</a></td>
      <td valign="top" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt" align="right"><a href="#146">&#160;F-146</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#f145">Condensed
          Consolidated Statements of Income for the three months ended March 31,
          2007 and<br>
          April 1, 2006</a></div></td>
      <td valign="top" width="13"><a href="#f145">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt" align="right"><a href="#f145">&#160;F-147</a></div></td>
    </tr>
    <tr bgcolor="#ccffcc">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#148">Condensed
          Consolidated Statements of Cash Flows for the three months ended March
          31, 2007<br>
          and April 1, 2006</a></div></td>
      <td valign="top" width="13"><a href="#148">&#160;</a></td>
      <td valign="bottom" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt" align="right"><a href="#148">&#160;F-148</a></div></td>
    </tr>
    <tr bgcolor="white">
      <td valign="bottom" width="560"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt"><a href="#149">Notes
          to the Condensed Consolidated Financial Statements</a></div></td>
      <td valign="top" width="13"><a href="#149">&#160;</a></td>
      <td valign="top" width="50"> <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt" align="right"><a href="#149">&#160;F-149</a></div></td>
    </tr>
  </table>
    </div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 13.35pt" align="center"><br></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-1</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
<div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always" align="center">
  <p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
  <p><strong><a name="f2"></a>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
    FIRM</strong></p>
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">Board of Directors and
      Partners of<br>American Real Estate Holdings Limited Partnership</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      audited the accompanying consolidated balance sheets of American Real Estate
      Holdings Limited Partnership and Subsidiaries as of December 31, 2006 and 2005,
      and the related consolidated statements of operations, changes in partners&#8217;
equity and comprehensive income, and cash flows for each of the three years
      in
      the period ended December 31, 2006. These consolidated financial statements
      are
      the responsibility of the Partnership&#8217;s management. Our responsibility is to
      express an opinion on these financial statements based on our audits. We did
      not
      audit the financial statements of GB Holdings, Inc. and Subsidiaries for the
      year ended December 31, 2004, which statements reflect losses of $12,822,000
      included in the discontinued operations. Those statements were audited by other
      auditors, whose report thereon has been furnished to us, and our opinion,
      insofar as it relates to the amounts included for GB Holdings, Inc. and
      Subsidiaries, is based solely on the report of the other auditors. Those
      auditors expressed an unqualified opinion with emphasis on a going concern
      matter on those financial statements in their report dated March 11, 2005.
      Also,
      we did not audit the financial statements of ImClone Systems Incorporated and
      Subsidiary, the investment in which, as discussed in Notes 2 and 7 to the
      financial statements, is accounted for by the equity method of accounting.
      The
      investment in ImClone Systems Incorporated and Subsidiary was $164,307,000
      and
      $97,255,000 as of December 31, 2006 and 2005, respectively, and the equity
      in
      its net income was $12,620,000 and $1,375,000 respectively, for the years then
      ended. The financial statements of ImClone Systems Incorporated and Subsidiary
      were audited by other auditors whose report has been furnished to us, and our
      opinion, insofar as it relates to the amounts included for ImClone Systems
      Incorporated and Subsidiary, is based solely on the reports of the other
      auditors.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits and the reports
      of
      the other auditors provide a reasonable basis for our opinion.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In our
      opinion, based on our audits and the reports of the other auditors, the
      consolidated financial statements referred to above present fairly, in all
      material respects, the consolidated financial position of American Real Estate
      Holdings Limited Partnership and Subsidiaries as of December 31, 2006 and 2005,
      and the consolidated results of their operations and their consolidated cash
      flows for each of the three years in the period ended December 31, 2006 in
      conformity with accounting principles generally accepted in the United States
      of
      America.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      discussed in Notes 2 and 7, in 2006, the Partnership changed the accounting
      for
      its investment in ImClone Systems Incorporated and Subsidiary from an available
      for sale security to the equity method.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">/s/ GRANT THORNTON LLP</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">New York, New York<br>March
      2, 2007</div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-2</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong><a name="f3"></a>REPORT
  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">To the Shareholders of GB
      Holdings, Inc.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      audited the consolidated statements of operations, changes in shareholders&#8217;
equity and cash flows for the year ended December 31, 2004 of GB Holdings,
      Inc.
      and subsidiaries. These consolidated financial statements are the responsibility
      of the company&#8217;s management. Our responsibility is to express an opinion on
      these consolidated financial statements based on our audit.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audit provides a
      reasonable basis for our opinion.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">In our opinion, the
      consolidated financial statements referred to above present fairly, in all
      material respects, the results of operations and cash flows of GB Holdings,
      Inc.
      and subsidiaries for the year ended December 31, 2004, in conformity with US
      generally accepted accounting principles.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      consolidated financial statements have been prepared assuming that GB Holdings,
      Inc. will continue as a going concern. As discussed in Notes 1 and 2 to the
      consolidated financial statements, the Company has suffered recurring net
      losses, has a net working capital deficiency and has significant debt
      obligations which are due within one year that raise substantial doubt about
      its
      ability to continue as a going concern. Management&#8217;s plans in regard to these
      matters are also described in Notes 1 and 2. The consolidated financial
      statements do not include any adjustments that might result from the outcome
      of
      this uncertainty.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">/s/ KPMG LLP</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">Short Hills, New
      Jersey<br>March 11, 2005</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-3</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong><a name="f4"></a>REPORT
  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">To Board of Directors and
      Stockholders<br>ImClone Systems Incorporated:</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      audited the consolidated balance sheets of ImClone Systems Incorporated and
      subsidiary as of December 31, 2006 and 2005, and the related consolidated
      statements of operations, stockholders&#8217; equity (deficit) and comprehensive
      income, and cash flows for the years then ended, not presented separately
      herein. These consolidated financial statements are the responsibility of the
      Company&#8217;s management. Our responsibility is to express an opinion on these
      consolidated financial statements based on our audits.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of ImClone Systems Incorporated
      and subsidiary as of December 31, 2006 and 2005, and the results of their
      operations and their cash flows for the years then ended, in conformity with
      U.S. generally accepted accounting principles.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      discussed in notes 2(i) and 11(d) to the consolidated financial statements,
      the
      Company adopted the provisions of Statement of Financial Accounting Standards
      No. 123R, &#8220;Share-Based Payment,&#8221; effective January 1, 2006.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">/s/
      KPMG LLP</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">Princeton, New
      Jersey<br>March 1, 2007</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-4</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong><a name="f5"></a>AMERICAN
  REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>CONSOLIDATED
      BALANCE SHEETS<br>December 31, 2006 and
      2005</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="337">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="45">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="45">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="450">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="5" valign="bottom" width="154" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="450">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="68" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="67" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="450">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="5" valign="bottom" width="154">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                $000s)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>ASSETS</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash
                equivalents&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">1,912,134</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">459,315</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investments</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">539,115</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">720,526</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories,
                net</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">245,502</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">244,239</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Trade,
                notes and other receivables, net</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">176,496</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">195,321</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                current assets</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">134,987</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">214,860</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Assets
                held for sale</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">47,503</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,177,397</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current assets</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,055,737</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,011,658</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment, net:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">422,715</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">295,432</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">283,974</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">288,254</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">200,382</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">166,026</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                property, plant and equipment, net</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">907,071</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">749,712</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                investment and other</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">177,682</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">98,041</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intangible
                assets</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">25,916</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">23,402</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                assets</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">85,237</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">85,406</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Total
                assets</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,251,643</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">3,968,219</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>LIABILITIES
                AND PARTNERS&#8217; EQUITY</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Current
                liabilities:</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">69,854</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">57,602</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accrued
                expenses and other current liabilities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">197,792</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">143,427</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                portion of long-term debt</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">23,970</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">18,103</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Securities
                sold not yet purchased</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">25,398</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">75,883</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Margin
                liability on marketable securities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">131,061</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Liabilities
                of discontinued operations held for sale</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">489,598</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current liabilities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">317,014</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">915,674</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">1,175,271</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">1,100,220</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                non-current liabilities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">22,212</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24,006</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                long-term liabilities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,197,483</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,124,226</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Total
                liabilities</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,514,497</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,039,900</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">292,221</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">304,599</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Commitments
                and contingencies (Note 17)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Partners&#8217;
                equity</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Limited
                partner</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">2,420,476</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">1,607,483</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">General
                partner</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24,449</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">16,237</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Partners&#8217;
                equity</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,444,925</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,623,720</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="450">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Total
                liabilities and partners&#8217; equity</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,251,643</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">3,968,219</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10.65pt; MARGIN-BOTTOM: 5.35pt" align="center"><br><br></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt" align="center"><i>See notes
      to
      consolidated financial statements.</i></div>
    <div style="MARGIN: 0pt" align="center">F-5</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt; PAGE-BREAK-BEFORE: always" align="center">
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<div style="MARGIN: 0pt" align="center"><strong><a name="f6"></a>AMERICAN REAL
  ESTATE HOLDINGS LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>CONSOLIDATED
      STATEMENTS OF OPERATIONS<br>Years Ended
      December 31, 2006, 2005 and 2004</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="293">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="390">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="8" valign="bottom" width="210" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Years
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            <td valign="bottom" width="4">&#160;</td>
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          <tr>
            <td valign="bottom" width="390">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="65" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
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            <td valign="bottom" width="18">&#160;</td>
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              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
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            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
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            <td valign="bottom" width="4">&#160;</td>
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          <tr>
            <td valign="bottom" width="390">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="8" valign="bottom" width="210">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                $000s)</div>
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            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues:</div>
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            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
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          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
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            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
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            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
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            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">385,699</div>
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            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">327,982</div>
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            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
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            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">299,981</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">134,575</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">100,299</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">61,557</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">957,656</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">472,681</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,477,930</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">900,962</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">361,538</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expenses:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">326,984</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">260,955</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">251,119</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">106,621</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">82,512</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">49,681</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">1,108,293</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">495,110</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Holding
                Company</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">25,822</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">12,478</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">4,327</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Acquisition
                costs</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,664</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">414</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,567,720</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">855,719</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">305,541</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                (loss) income</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(89,790</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">45,243</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">55,997</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                income (expense), net:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(100,514</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(85,418</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(42,209</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                income</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">52,656</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">42,791</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">42,145</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                income (expense), net</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">99,277</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(12,861</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">24,453</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in earnings of affiliate</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">12,620</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,375</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">(Loss)
                income from continuing operations before income taxes and<br>minority
                interests</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(25,751</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(8,870</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">80,386</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                tax expense</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(13,271</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(18,170</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(10,099</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">68,173</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">10,140</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Income
                (loss) from continuing operations</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">29,151</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(16,900</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">70,287</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Discontinued
                operations:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) from discontinued operations, net of income taxes</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">154,831</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(28,544</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">11,307</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gain
                on sales of assets, net of income taxes</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">676,444</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">21,849</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">75,197</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(55,511</div>
            </td>
            <td valign="bottom" width="18" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,682</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,074</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Income
                (loss) from discontinued operations</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">775,764</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(3,013</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">88,578</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                earnings (loss)</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">804,915</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(19,913</div>
            </td>
            <td valign="bottom" width="18" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">158,865</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                earnings (loss) attributable to:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Limited
                partners</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">796,866</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(19,714</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">157,276</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">General
                partner</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8,049</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(199</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,589</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">804,915</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(19,913</div>
            </td>
            <td valign="bottom" width="18" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">158,865</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10.65pt; MARGIN-BOTTOM: 5.35pt" align="center"><br><br></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt" align="center"><i>See notes
      to
      consolidated financial statements.</i></div>
    <div style="MARGIN: 0pt" align="center">F-6</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt; PAGE-BREAK-BEFORE: always" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
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            </td>
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            </td>
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            </td>
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    </div>

<div style="MARGIN: 0pt" align="center"><strong><a name="f7"></a>AMERICAN REAL
  ESTATE HOLDINGS LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>CONSOLIDATED
      STATEMENTS OF CHANGES IN PARTNERS&#8217;<br>EQUITY
      AND COMPREHENSIVE INCOME (LOSS)<br>Years Ended December 31, 2006, 2005 and
      2004</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="290">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="27">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="47">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="47">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="386">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>General<br>Partner&#8217;s<br>Equity</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Limited<br>Partners&#8217;<br>Equity</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Total<br>Partners&#8217;<br>Equity</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="386">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="216">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                $000s)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 5pt; PADDING-LEFT: 5.75pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 10.3pt"><strong>Balance,
                December 31, 2003</strong></div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">16,447</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">1,628,268</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">1,644,715</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Comprehensive
                income:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                earnings</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">1,589</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">157,277</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">158,865</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Reclassification
                of unrealized gains on marketable securities sold</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(96</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(9,472</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(9,568</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                unrealized gains on securities available for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">33</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">33</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Comprehensive
                income</div>
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            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">1,493</div>
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            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">147,837</div>
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            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">149,330</div>
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            <td valign="bottom" width="4">&#160;</td>
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          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
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            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(179</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(17,737</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(17,916</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
                contribution to American Casino</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">228</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">22,572</div>
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            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">22,800</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Arizona
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            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(1,259</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(124,641</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(125,900</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in deferred tax asset related to acquisition of Arizona Charlies</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">25</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">2,465</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">2,490</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                adjustment for Panaco acquisition</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">916</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">90,645</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">91,561</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Distribution
                to general partner</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(19</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(1,900</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(1,919</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(10</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(966</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(976</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Balance,
                December 31, 2004</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">17,642</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,746,544</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,764,185</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Comprehensive
                income:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                earnings (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(199</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(19,714</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(19,913</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                unrealized gains (loss) on securities available for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(42</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(4,155</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(4,197</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                comprehensive income (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(76</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(77</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Comprehensive
                loss</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(242</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(23,945</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(24,187</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">General
                partner contribution</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">93</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">9,186</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">9,279</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">AREP
                Oil &amp; Gas acquisitions</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(1,717</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(170,025</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(171,742</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">GBH/Atlantic
                Coast acquisitions</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">582</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">57,667</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">58,249</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in reporting entity and other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">24</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">2,426</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">2,450</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">CEO
                LP unit options</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">487</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">492</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Return
                of capital to GB Holdings, Inc.</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(26</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(2,572</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(2,598</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Partnership
                distributions</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(126</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(12,496</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(12,622</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in ImClone capital transactions</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">210</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">212</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Balance,
                December 31, 2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">16,237</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,607,483</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,623,720</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Comprehensive
                income:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                earnings</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">8,049</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">796,866</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">804,915</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                unrealized gains on securities available for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">297</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">29,387</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">29,684</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                comprehensive income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">149</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">150</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Comprehensive
                Income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">8,347</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">826,402</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">834,749</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">CEO
                LP unit options</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">62</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">6,186</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">6,248</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Atlantic
                Coast bond conversion</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">22</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">2,189</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">2,211</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Partnership
                distributions</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(252</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(24,993</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(25,245</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in ImClone capital transactions</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">32</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,210</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,242</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Balance,
                December 31, 2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">24,449</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="63" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,420,476</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="63" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,444,925</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Accumulated
      other comprehensive income (loss) at December 31, 2006, 2005 and 2004 was $25.4
      million, $(4.5) million and $(0.1) million, respectively.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt" align="center"><i>See notes
      to
      consolidated financial statements.</i></div>
    <div style="MARGIN: 0pt" align="center">F-7</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong><a name="f8"></a>AMERICAN
  REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>CONSOLIDATED
      STATEMENTS OF CASH FLOWS<br>Years Ended
      December 31, 2006, 2005 and 2004</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="289">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="386">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="216" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Years
                Ended December 31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="386">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="386">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="216">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                $000s)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Operating Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Continuing Operations:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) from continuing
                operations&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">29,151</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(16,900</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">70,287</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Adjustments
                to reconcile net earnings to net cash provided by<br>operating
                activities:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">70,945</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">48,188</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">28,975</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investment
                (gains) losses</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(91,308</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">21,260</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(16,540</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interest</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(68,173</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(10,140</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in earnings of affiliate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(12,620</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(1,375</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Stock
                based compensation expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">6,248</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">492</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                income tax expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">8,364</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">7,507</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Impairment
                loss on fixed assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">33,701</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash provided by activities on trading securities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">70,636</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">28,560</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(5,927</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(2,571</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(9,690</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Changes
                in operating assets and liabilities:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Decrease
                (increase) in trade notes and other receivables</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">49,710</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">10,671</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(7,921</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Decrease
                (increase) in other assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">34,118</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(9,684</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(124,004</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">(Increase)
                decrease in inventory</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">8,822</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">17,880</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Increase
                (decrease) in accounts payable, accrued expenses and<br>other
                liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(7,570</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(51,399</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">89,477</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash provided by continuing operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">117,735</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">43,346</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38,091</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Discontinued Operations:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                (loss) from discontinued operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">775,764</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(3,013</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">88,578</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation,
                depletion and amortization</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">106,936</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">108,496</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">77,458</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in fair market value of Oil &amp; Gas derivative contracts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(99,707</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">69,254</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">9,179</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Impairment
                loss on GBH</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">52,366</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">15,600</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                (gain) from sales of businesses and properties</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(676,444</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(21,849</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(75,197</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">65,904</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(30,441</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9,661</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 42pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash provided by discontinued operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">172,453</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">174,813</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">125,279</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 42pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                cash provided by operating activities</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right"><strong>290,188</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right"><strong>218,159</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right"><strong>163,370</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Investing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Continuing Operations:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
                expenditures</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(61,338</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(36,380</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(109,532</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Purchases
                of marketable equity and debt securities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(243,162</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(764,271</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(283,615</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from sales of marketable equity and debt securities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">566,575</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">190,287</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">93,556</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds from the sale and disposition of real estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">8,414</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">43,590</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds from the sale and disposition of fixed assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">21,867</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Purchase
                of debt securities of affiliates</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(101,500</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Acquisitions
                of businesses, net of cash acquired</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(208,645</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(293,649</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(125,900</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9,586</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">50,848</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash provided by (used in) investing activities &#8211;
                continuing<br>operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">75,297</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(886,013</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(432,553</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Discontinued Operations:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
                expenditures</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(306,696</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">(326,309</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(132,220</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds from the sales and disposition of assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">1,308,713</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">54,752</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">202,344</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(18,427</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,704</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">21,090</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash provided by (used in) investing activities &#8211;
                discontinued<br>operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">983,590</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(266,853</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">91,214</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="386">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Net
                cash provided by (used in) investing activities</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right"><strong>1,058,887</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right"><strong>(1,152,866</strong></div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt"><strong>)</strong></div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right"><strong>(341,339</strong></div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt"><strong>)</strong></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10.65pt; MARGIN-BOTTOM: 5.35pt" align="center"><br><br></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt" align="center"><i>See notes
      to
      consolidated financial statements.</i></div>
    <div style="MARGIN: 0pt" align="center">F-8</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt; PAGE-BREAK-BEFORE: always" align="center">
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    <div style="MARGIN: 0pt" align="center"><strong>AMERICAN REAL ESTATE HOLDINGS
      LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>CONSOLIDATED
      STATEMENTS OF CASH FLOWS &#8211;
(continued)<br>Years Ended December 31, 2006, 2005 and 2004</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="288">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="39">
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            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
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            </td>
          </tr>
          <tr>
            <td valign="bottom" width="384">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="8" valign="bottom" width="216" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Years
                Ended December 31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="384">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="65" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="384">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="8" valign="bottom" width="216">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                $000s)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Financing Activities:</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Continuing Operations:</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Partners&#8217;
                equity:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Members
                contribution</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">9,279</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">22,800</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Partnership
                distributions</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(25,245</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(12,622</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(17,916</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Debt:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from issuance of senior notes payable</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">474,000</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">557,594</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from credit facilities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">60,000</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Repayment
                of credit facilities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(21,034</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                change in due to/from affiliates</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">674</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">21,636</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(16,468</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from mortgages payable</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">34,250</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">4,425</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">10,000</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Mortgages
                paid upon disposition of properties</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(3,777</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(26,800</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Periodic
                principal payments</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(6,473</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(3,941</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(5,248</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Debt
                issuance costs</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(8,257</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(8,952</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(18,111</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,258</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(3</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash provided by financing activities &#8211; continuing operations</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">33,915</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">484,306</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">505,848</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Discontinued Operations:</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash (used in) provided by financing activities &#8211; discontinued
                operations</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(24,276</div>
            </td>
            <td valign="bottom" width="18" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">219,568</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(74,797</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                cash provided by financing activities</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right"><strong>9,639</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right"><strong>703,874</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right"><strong>431,051</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                increase (decrease) in cash and cash equivalents</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">1,358,714</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(230,833</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">253,082</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                change in cash of assets held for sale</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">94,104</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(72,432</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">22,125</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents, beginning of period</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">459,316</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">762,581</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">487,374</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and cash equivalents, end of period</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt"><strong>$</strong></div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right"><strong>1,912,134</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt"><strong>$</strong></div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right"><strong>459,316</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt"><strong>$</strong></div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right"><strong>762,581</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Supplemental
                information</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                payments for interest, net of amounts capitalized</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">106,635</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">77,745</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">60,472</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                payments for income taxes, net of refunds</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">15,439</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">10,194</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,912</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Conversion
                of bonds in connection with acquisition of WPI</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">205,850</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                unrealized gains (losses) on securities available for sale</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">29,684</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(4,197</div>
            </td>
            <td valign="bottom" width="18" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">33</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">LP
                unit issuance</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">456,998</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in tax asset related to acquisitions</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7,329</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,490</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Debt
                conversion relating to Atlantic Coast</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,211</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">29,500</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="384">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                received in consideration for sale of oil and gas operations</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">231,156</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt" align="center"><i>See notes
      to
      consolidated financial statements.</i></div>
    <div style="MARGIN: 0pt" align="center">F-9</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong><a name="f10"></a>AMERICAN
  REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>1. Description of
      Business and Basis of Presentation</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>General</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">American
      Real Estate Holdings Limited Partnership, or the Company or AREH, is a
      diversified holding company owning subsidiaries engaged in the following
      continuing operating businesses: Gaming; Real Estate; and Home Fashion. In
      November 2006, we divested our Oil and Gas operating business and our Atlantic
      City gaming properties. Further information regarding our reportable segments
      is
      contained in Note 15.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREH
      is a
      limited partnership formed in Delaware on February 17, 1987. American Real
      Estate Partners, L.P. (&#8220;AREP&#8221; or the &#8220;Limited Partner&#8221;) is a master limited
      partnership formed in Delaware on February 17, 1987. AREP owns a 99% limited
      partner interest in the Company. American Property Investors, Inc. (the &#8220;General
      Partner&#8221;) owns a 1% general partner interest in both AREH and AREP representing
      an aggregate 1.99% general partner interest in the Company and AREP. The General
      Partner is owned and controlled by Mr.&#160;Carl C. Icahn (&#8220;Icahn&#8221; or
&#8220;Mr.&#160;Icahn&#8221;).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Under
      our
      amended Partnership Agreement we are permitted to make non-real estate related
      acquisitions and investments to enhance our partners&#8217; value and further
      diversify our assets. Investments may include equity and debt securities of
      domestic and foreign issuers. The portion of the Company&#8217;s assets invested in
      any one type of security or any single issuer are not limited.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We will
      conduct our activities in such a manner as not to be deemed an investment
      company under the Investment Company Act of 1940, or the 1940 Act. Generally,
      this means that no more than 40% of the Company&#8217;s total assets will be invested
      in investment securities, as such term is defined in the 1940 Act. In addition,
      we do not intend to invest in securities as our primary business. We will
      structure our investments to continue to be taxed as a partnership rather than
      as a corporation under the applicable publicly traded partnership rules of
      the
      Internal Revenue Code.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Acquisitions</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On August
      8, 2005, WestPoint International, Inc., or WPI, our indirect majority-owned
      subsidiary, completed the acquisition of substantially all of the assets of
      WestPoint Stevens Inc., or WPS. Operating results for WPI are included with
      AREP&#8217;s results beginning as of August 8, 2005. In December 2006, WPI acquired a
      manufacturing facility in Bahrain for an aggregate cash consideration of $98.6
      million and a seller note of $10.6 million. The purchase price is subject to
      working capital adjustments.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On May
      19, 2006, our wholly-owned subsidiaries, AREP Laughlin Corporation, and AREP
      Boardwalk Properties LLC, completed the purchases, respectively, of the Flamingo
      Laughlin Hotel and Casino, now known as the Aquarius Casino Resort, or the
      Aquarius, in Laughlin, Nevada, and 7.7 acres of land adjacent to The Sands
      Hotel
      and Casino in Atlantic City, New Jersey, known as the Traymore site, from
      affiliates of Harrah&#8217;s Operating Company, Inc., or Harrah&#8217;s. Operating results
      for the Aquarius are included with AREH&#8217;s results beginning as of May 19,
      2006.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Discontinued
      Operations</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      November 17, 2006, our indirect majority owned subsidiary, Atlantic Coast
      Entertainment Holdings, Inc., completed the sale to Pinnacle Entertainment,
      Inc., or Pinnacle, of the outstanding membership interests in ACE Gaming LLC,
      the owner of The Sands and 100% of the equity interests in certain subsidiaries
      of AREH which own parcels of real estate adjacent to The Sands, including the
      Traymore site to Pinnacle. See Note 5 for additional information regarding
      the
      sale.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-10</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>1. Description of
      Business and Basis of Presentation &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      November 21, 2006, our indirect wholly-owned subsidiary, AREP O &amp; G Holdings
      LLC, consummated the sale of all of the issued and outstanding membership
      interests of NEG Oil &amp; Gas LLC to SandRidge Energy, Inc formerly Riata
      Energy, Inc. See Note 5 for additional information regarding the sale.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Certain
      of our real estate properties are classified as discontinued operations. The
      properties classified as discontinued operations have changed during 2006 and,
      accordingly, certain amounts in the accompanying 2005 and 2004 financial
      statements have been reclassified to conform to the current classification
      of
      properties.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      financial position and results of these operations are presented as assets
      and
      liabilities of discontinued operations held for sale in the consolidated balance
      sheets and discontinued operations in the consolidated statements of operations,
      respectively, for all periods presented in accordance with Statement of
      Financial Accounting Standards (SFAS) No. 144, <i>Accounting for the Impairment
      or Disposal of Long-Lived Assets</i>.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Filing Status
      of
      Subsidiaries</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">National
      Energy Group, Inc., or NEGI, and Atlantic Coast are reporting companies under
      the Securities Exchange Act of 1934. In addition, American Casino &amp;
Entertainment Properties LLC, or American Casino or ACEP, voluntarily files
      annual, quarterly and current reports. Each of these reports is separately
      filed
      with the Securities and Exchange Commission and are publicly available.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>2. Summary of
      Significant Accounting Policies</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      discussed in Note 1, we operate in several diversified segments. The accounting
      policies related to the specific segments or industries are differentiated,
      as
      required, in the list of significant accounting policies set out below.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Principles of
      Consolidation</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      accompanying consolidated financial statements include the accounts of AREH
      and
      the majority-owned subsidiaries in which AREH has a controlling financial
      interest as of the financial statement date. We are considered to have control
      if we have a direct or indirect ability to make decisions about an entity&#8217;s
      activities through voting or similar rights. We use the guidance set forth
      in
      AICPA Statement of Position No. 78-9, <i>Accounting for Investments in Real
      Estate Ventures</i>, and Emerging Issues Task Force Issue No. 04-05,
<i>Investor&#8217;s Accounting for an Investment in a Limited Partnership when the
      Investor is the Sole General Partner and the Limited Partners have Certain
      Rights</i>, with respect to our investments in partnerships and limited
      liability companies. All intercompany balance and transactions are
      eliminated.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      utilize the equity method of accounting with respect to investments where we
      exercise significant influence, but not control, over the operating and
      financial policies of the investee. A voting interest of at least 20% and no
      greater than 50% is normally a prerequisite for utilizing the equity method.
      However, we may apply the equity method with less than 20% voting interests
      based upon the facts and circumstances including representation on the
      investee&#8217;s Board of Directors, contractual veto or approval rights,
      participation in policy making processes and the existence or absence of other
      significant owners. In applying the equity method, investments are recorded
      at
      cost and subsequently increased or decreased by our proportionate share of
      the
      net earnings or losses of the investee. We also record our proportionate share
      of other comprehensive income items of the investee as a component of our
      comprehensive income. Dividends or other equity distributions are recorded
      as a
      reduction of the investment.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      accordance with generally accepted accounting principles, assets and liabilities
      transferred between entities under common control are accounted for at
      historical cost in a manner similar to a pooling of interests, and the financial
      statements of previously separate companies for periods prior to their
      acquisition are retrospectively adjusted on a combined basis.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-11</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>2. Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      required by FIN 46R, <i>Consolidation of Variable Interest Entities</i>, we
      evaluate our investments and other financial relationships to determine whether
      any further entities are required to be consolidated.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Retrospective
      Application of Change in Accounting for Investment in ImClone Systems
      Incorporated</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In the
      fourth quarter of 2006 we changed our method of accounting for our investment
      in
      ImClone Systems Incorporated, or ImClone, to the equity method of accounting.
      Previously, we accounted for our investment in ImClone as an available for
      sale
      security. In accordance with SFAS No. 115, <i>Accounting for Certain Investments
      in Debt and Equity Securities</i>, available for sale securities are reported at
      fair value, with unrealized gains and losses excluded from earnings and reported
      in a separate component of shareholders&#8217; equity as &#8220;Other Comprehensive Income.&#8221;
We record our proportionate equity in the ImClone&#8217;s earnings and capital
      transactions on a one calendar quarter time lag.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">From
      the
      first quarter of 2005 through the third quarter of 2006, AREH and certain other
      affiliates of Mr.&#160;Icahn purchased shares of common stock of ImClone. As of
      September 30, 2006, the total shares of ImClone held by AREH as a percentage
      of
      ImClone&#8217;s total outstanding shares was 5.4%. Also, in October 2006,
      Mr.&#160;Icahn was appointed Chairman of the board of directors of ImClone and
      certain other changes to ImClone&#8217;s board of directors took place which resulted
      in Mr.&#160;Icahn having the ability to exercise significant influence over the
      operating and financial policies of ImClone.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      assessing the applicability of Accounting Principles Board Opinion No. 18,
      <i>The Equity Method of Accounting for Investments in Common Stock</i>, we have
      determined that, because of the ability of Mr.&#160;Icahn to exercise
      significant influence over ImClone&#8217;s operating and financial policies, we were
      required to adopt the equity method of accounting for our investment in ImClone,
      and accordingly the 2005 financial statements have been adjusted to apply the
      new method retrospectively. See Note 7 for information regarding the effect
      of
      this change on net income and total partners equity.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Use of Estimates
      in
      Preparation of Financial Statements</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      preparation of the consolidated financial statements in conformity with
      generally accepted accounting principles requires management to make estimates
      and assumptions that affect the reported amount of assets and liabilities at
      the
      date of the financial statements and the reported amount of revenues and
      expenses during the period.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      more significant estimates include (1) the valuation allowances of accounts
      receivable and inventory, <br>(2) the valuation of long-lived assets, mortgages
      and notes receivable, marketable equity and debt securities and other
      investments, (3) costs to complete for land, house and condominium developments,
      (4) gaming-related liability and promotional programs, (5) deferred tax assets,
      (6) oil and gas reserve estimates, (7) asset retirement obligations and (8)
      fair
      value of derivatives. Actual results may differ from the estimates and
      assumptions used in preparing the consolidated financial statements.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Cash and Cash
      Equivalents</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      consider short-term investments, which are highly liquid with original
      maturities of three months or less at date of purchase, to be cash
      equivalents.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Restricted
      Cash</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Restricted
      cash results primarily from escrow deposits, funds held in connection with
      collateralizing letters of credit and proceeds from securities sold but not
      yet
      purchased that require cash to be on deposit with the relevant brokerage
      institution. Restricted cash was $87.4 million and $161.2 million at December
      31, 2006 and 2005, respectively, and is included as a component of other current
      assets in the accompanying consolidated balance sheets.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-12</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>2. Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Investments</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Investments
      in
      equity and debt securities are classified as either trading or available for
      sale based upon whether we intend to hold the investment for the foreseeable
      future. Trading securities are valued at quoted market value at each balance
      sheet date with the unrealized gains or losses reflected in the consolidated
      statements of operations. Available for sale securities are carried at fair
      value on our balance sheet. Unrealized holding gains and losses on available
      for
      sale securities are excluded from earnings and reported as a separate component
      of partners&#8217; equity and when sold are reclassified out of partners&#8217; equity. For
      purposes of determining gains and losses, the cost of securities is based on
      specific identification.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">A decline
      in the market value of any available for sale security below cost that is deemed
      to be other than temporary results in an impairment that is charged to earnings
      and the establishment of a new cost basis for the investment. Dividend income
      is
      recorded when declared and interest income is recognized when earned.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Accounts
      Receivable</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">An
      allowance for doubtful accounts is determined through analysis of the aging
      of
      accounts receivable at the date of the consolidated financial statements,
      assessments of collectibility based on an evaluation of historic and anticipated
      trends, the financial condition of our customers, and an evaluation of the
      impact of economic conditions. Our allowance for doubtful accounts is an
      estimate based on specifically identified accounts as well as general reserves
      based on historical experience.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Inventories</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">Inventories are stated at
      the lower of cost (first-in, first-out method) or market. The cost of
      manufactured goods, which are held only by WPI, includes material, labor and
      factory overhead. We maintain reserves for estimated excess, slow moving and
      obsolete inventory as well as inventory whose carrying value is in excess of
      net
      realizable value.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Inventories
      consisted of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="177">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="236">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="116" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="236">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="236">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="236">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Raw
                materials and
                supplies&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">32,059</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">33,083</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="236">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goods
                in process</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">83,592</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">100,337</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="236">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Finished
                goods</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">129,851</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">110,819</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="236">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">245,502</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">244,239</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Property, Plant
      and
      Equipment</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Land
      and
      construction-in-progress costs are stated at the lower of cost or net realizable
      value. Interest is capitalized on expenditures for long-term projects until
      a
      salable condition is reached. The interest capitalization rate is based on
      the
      interest rate on specific borrowings to fund the projects.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Buildings,
      furniture and equipment are stated at cost less accumulated depreciation unless
      declines in the values of the fixed assets are considered other than temporary,
      at which time the property is written down to net realizable value. Depreciation
      is principally computed using the straight-line method over the estimated useful
      lives of the particular property or equipment, as follows: buildings and
      improvements, 4 to 40 years; furniture, fixtures and equipment, 1 to 18 years.
      Leasehold improvements are amortized over the life of the lease or the life
      of
      the improvement, whichever is shorter.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-13</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>2. Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Maintenance
      and repairs are charged to expense as incurred. The cost of additions and
      improvements is capitalized and depreciated over the remaining useful lives
      of
      the assets. The cost and accumulated depreciation of assets sold or retired
      are
      removed from our consolidated balance sheet, and any gain or loss is recognized
      in the year of disposal.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Real
      estate properties held for use or investment, other than those accounted for
      under the financing method, are carried at cost less accumulated depreciation.
      Where declines in the values of the properties are determined to be other than
      temporary, the cost basis of the property is written down to net realizable
      value. A property is classified as held for sale at the time management
      determines that the criteria in SFAS No. 144 <i>Accounting for the
      Impairment</i><i>or Disposal of Long-Lived Assets</i> have been met. Properties
      held for sale are carried at the lower of cost or net realizable value. Such
      properties are no longer depreciated and their results of operations are
      included in discontinued operations. As a result of the reclassification of
      certain real estate to properties held for sale during the year ended December
      31, 2006, income and expenses of such properties are reclassified to
      discontinued operations for all prior periods. If management determines that
      a
      property classified as held for sale no longer meets the criteria in SFAS 144,
      the property is reclassified as held for use.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Intangible
      Assets</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Intangible
      assets consist of trademarks of WPI (Note 4). In accordance with SFAS No. 142,
      <i>Goodwill and Other Intangible Assets</i>, goodwill and intangible assets with
      indefinite lives are no longer amortized, but instead tested for
      impairment.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Accounting for
      the
      Impairment of Long-Lived Assets</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      evaluate our long-lived assets in accordance with the application of SFAS No.
      144. Accordingly, we evaluate the realizability of our long-lived assets
      whenever events or changes in circumstances indicate that the carrying amount
      of
      an asset may not be recoverable. Inherent in the reviews of the carrying amounts
      of the above assets are various estimates, including the expected usage of
      the
      asset. Assets must be tested at the lowest level for which identifiable cash
      flows exist. Future cash flow estimates are, by their nature, subjective and
      actual results may differ materially from our estimates. If our ongoing
      estimates of future cash flows are not met, we may have to record impairment
      charges in future accounting periods. Our estimates of cash flows are based
      on
      the current regulatory, social and economic climates, recent operating
      information and budgets of the operating property.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Accounting for
      Asset Retirement Obligations</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Effective
      January 1, 2003, we adopted the provisions of SFAS No. 143, <i>Accounting for
      Asset Retirement Obligations</i>. SFAS No. 143 provides accounting requirements
      for costs associated with legal obligations to retire tangible, long-lived
      assets. Under SFAS No. 143, an asset retirement obligation is recorded at fair
      value in the period in which it is incurred by increasing the carrying amount
      for the related long-lived asset which is depreciated over its useful life.
      In
      each subsequent period, the liability is adjusted to reflect the passage of
      time
      and changes in the estimated future cash flows underlying the obligation. Our
      asset retirement obligations relate to our oil and gas operating unit, which
      was
      sold to SandRidge in November 2006.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Oil and Natural
      Gas
      Properties</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      utilized the full cost method of accounting for our crude oil and natural gas
      properties. Under the full cost method, all productive and nonproductive costs
      incurred in connection with the acquisition, exploration and development of
      crude oil and natural gas reserves are capitalized and amortized on the
      units-of-production method based upon total proved reserves. The costs of
      unproven properties are excluded from the amortization calculation until the
      individual properties are evaluated and a determination is made as to whether
      reserves exist. Conveyances of properties, including gains or losses on
      abandonment of properties, are treated as adjustments to the cost of crude
      oil
      and natural gas properties, with no gain or loss recognized.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-14</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>2. Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Under
      the
      full cost method, the net book value of oil and natural gas properties, less
      related deferred income taxes, may not exceed the estimated after-tax future
      net
      revenues from proved oil and natural gas properties, discounted at 10% per
      year
      (the ceiling limitation). In arriving at estimated future net revenues,
      estimated lease operating expenses, development costs, abandonment costs, and
      certain production related and ad-valorem taxes are deducted. In calculating
      future net revenues, prices and costs in effect at the time of the calculation
      are held constant indefinitely, except for changes which are fixed and
      determinable by existing contracts. The net book value of oil and gas properties
      is compared to the ceiling limitation on a quarterly basis. We did not incur
      a
      ceiling write-down in 2006, 2005 or 2004.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      capitalized internal general and administrative costs of $1.5 million, $1.1
      million and $1.0 million for the period from January 1, 2006 to November 21,
      2006 and the years ended December 31, 2005 and 2004, respectively, with respect
      to our oil and gas activities. We have not capitalized interest expense. In
      November 2006, we sold our oil and gas operating units to SandRidge. Therefore,
      as of December 31, 2006 we have no capitalized costs relating to these
      operations.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our oil
      and natural gas properties are subject to extensive Federal, state and local
      environmental laws and regulations. These laws, which are constantly changing,
      regulate the discharge of materials into the environment and may require us
      to
      remove or mitigate the environment effects of the disposal or release of
      petroleum or chemical substances at various sites. Environmental expenditures
      are expensed or capitalized depending on their future economic benefit.
      Expenditures that relate to an existing condition caused by past operations
      and
      that have no future economic benefits are expensed. Liabilities for expenditures
      of a non-capital nature are recorded when environmental assessment and/or
      remediation is probable, and the costs can be reasonably estimated.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Derivatives</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">From
      time
      to time our subsidiaries enter into derivative contracts, including (a)
      commodity price collar agreements entered into by our Oil &amp; Gas segment to
      reduce our exposure to price risk in the spot market for natural gas and oil
      and
      (b) commodity futures contracts, forward purchase commodity contracts and option
      contracts entered into by our Home Fashion segment primarily to manage our
      exposure to cotton commodity price risk. We follow SFAS No. 133, <i>Accounting
      for Derivative Instruments and Hedging Activities</i>, which was amended by SFAS
      No. 138, <i>Accounting for Certain Derivative Instruments and Certain Hedging
      Activities</i>. These pronouncements established accounting and reporting
      standards for derivative instruments and for hedging activities, which generally
      require recognition of all derivatives as either assets or liabilities in the
      balance sheet at their fair value. The accounting for changes in fair value
      depends on the intended use of the derivative and its resulting designation.
      Through December 31, 2006, we did not use hedge accounting and accordingly,
      all
      unrealized gains and losses are reflected in our consolidated statement of
      operations.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Revenue and Expense
      Recognition</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Home
      Fashion</i>&#8212; WPI records revenue when the following criteria are met: persuasive
      evidence of an arrangement exists, delivery has occurred, the price to the
      customer is fixed and determinable and collectibility is reasonably assured.
      Unless otherwise agreed in writing, title and risk of loss pass from WPI to
      the
      customer when WPI delivers the merchandise to the designated point of delivery,
      to the designated point of destination, or to the designated carrier, free
      on
      board. Provisions for certain rebates, sales incentives, product returns and
      discounts to customers are recorded in the same period the related revenue
      is
      recorded.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Customer
      incentives are provided to WPI customers primarily for new sales programs.
      These
      incentives begin to accrue when a commitment has been made to the customer
      and
      are recorded as a reduction to sales.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-15</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>2. Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Gaming</i>&#8212;
      Gaming segment revenue consists of casino, hotel and restaurant revenues. We
      recognize revenues in accordance with industry practice. Casino revenue is
      the
      net win from gaming activities (the difference between gaming wins and losses).
      Casino revenues are net of accruals for anticipated payouts of progressive
      and
      certain other slot machine jackpots. Gross revenues include the estimated retail
      value of hotel rooms, food and beverage and other items that are provided to
      customers on a complimentary basis. A corresponding amount is deducted as
      promotional allowances. The costs of such complimentary revenues are included
      in
      gaming expenses. Hotel and restaurant revenue is recognized when services are
      performed.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We also
      reward our customers, through the use of loyalty programs with points based
      on
      amounts wagered, that can be redeemed for a specified period of time for cash.
      We deduct the cash incentive amounts from casino revenue.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Oil
      and Gas</i>&#8212; Revenues from the natural gas and oil produced are recognized upon
      the passage of title, net of royalties. We account for natural gas production
      imbalances using the sales method, whereby we recognize revenue on all natural
      gas sold to our customers notwithstanding the fact its ownership may be less
      than 100% of the natural gas sold. Liabilities are recorded by us for imbalances
      greater than our proportionate share of remaining natural gas reserves. We
      had
      $0 million and $1.1 million in gas balancing liabilities as of December 31,
      2006
      and 2005, respectively.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Revenues
      from the sale of oil and natural gas are shown net of the impact of realized
      and
      unrealized derivative losses.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Real
      Estate</i>&#8212; Revenue from real estate sales and related costs are recognized at
      the time of closing primarily by specific identification. We follow the
      guidelines for profit recognition set forth by SFAS No. 66, <i>Accounting for
      Sales of Real Estate</i>.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Leases</i>&#8212;
      Substantially all of the property comprising our net lease portfolio is leased
      to others under long-term net leases and we account for these leases in
      accordance with the provisions of SFAS No. 13, <i>Accounting for Leases</i>, as
      amended. This statement sets forth specific criteria for determining whether
      a
      lease is to be accounted for as a financing lease or an operating lease. Under
      the financing method, minimum lease payments to be received plus the estimated
      value of the property at the end of the lease are considered the gross
      investment in the lease. Unearned income, representing the difference between
      gross investment and actual cost of the leased property, is amortized to income
      over the lease term so as to produce a constant periodic rate of return on
      the
      net investment in the lease. Under the operating method, revenue is recognized
      as rentals become due, and expenses (including depreciation) are charged to
      operations as incurred.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Income
      Taxes</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">No
      provision has been made for Federal, state or local income taxes on the results
      of operations generated by partnership activities, as such taxes are the
      responsibility of the partners. Provision has been made for Federal, state
      or
      local income taxes on the results of operations generated by our corporate
      subsidiaries. Deferred tax assets and liabilities are recognized for the future
      tax consequences attributable to differences between the financial statement
      carrying amounts of existing assets and liabilities and their respective tax
      bases and operating loss and tax credit carry forwards. Deferred tax assets
      and
      liabilities are measured using enacted tax rates expected to apply to taxable
      income in the years in which those temporary differences are expected to be
      recovered or settled. The effect on deferred tax assets and liabilities of
      a
      change in tax rates is recognized in income in the period that includes the
      enactment date.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Deferred
      tax assets are limited to amounts considered to be realizable in future periods.
      A valuation allowance is recorded against deferred tax assets if management
      does
      not believe that we have met the &#8220;more likely than not&#8221; standard imposed by SFAS
      No. 109 <i>Accounting for Income Taxes</i> to allow recognition of such an
      asset.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-16</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>2. Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Share-Based
      Compensation</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      December 2004, SFAS No. 123 (Revised 2004), <i>Share-Based Payment</i> (&#8220;SFAS
      No. 123R&#8221;) was issued. This accounting standard eliminated the ability to
      account for share-based compensation transactions using the intrinsic value
      method in accordance with APB Opinion No. 25 and requires instead that such
      transactions be accounted for using a fair-value-based method. SFAS No. 123R
      requires public entities to record non-cash compensation expense related to
      payment for employee services by an equity award, such as stock options, in
      their financial statements over the requisite service period. We have adopted
      SFAS No. 123R as of June 30, 2005. The adoption of SFAS No. 123R did not have
      any impact on our consolidated financial statements since there were no
      pre-existing unit options.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Recently Issued
      Accounting Pronouncements</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      September 2006, the SEC issued Staff Accounting Bulletin No. 108, <i>Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements</i> (&#8220;SAB 108&#8221;). SAB 108 provides guidance on
      how to evaluate prior period financial statement misstatements for purposes
      of
      assessing their materiality in the current period. If the prior period effect
      is
      material to the current period, then the prior period is required to be
      corrected. Correcting prior year financial statements would not require an
      amendment of prior year financial statements, but such corrections would be
      made
      the next time the company files the prior year financial statements. Upon
      adoption, SAB 108 allows a one-time transitional cumulative effect adjustment
      to
      retained earnings for corrections of prior period misstatements required under
      this statement. SAB 108 is effective for fiscal years ending after November
      15,
      2006. The adoption of SAB 108 did not have a material affect on our consolidated
      financial statements.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      September 2006, the FASB issued FAS 157, <i>Fair Value Measurements</i>, which
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. This statement applies under other accounting pronouncements
      that require or permit fair value measurements and, accordingly, SFAS 157 does
      not require any new fair value measurements. We are currently evaluating the
      impact this standard will have on our operating income and statement of
      financial position. This statement is effective for fiscal years beginning
      after
      November 15, 2007, and interim periods within those fiscal years. We will adopt
      SFAS 157 as of January 1, 2008, as required.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In July
      2006, the FASB issued FASB Interpretation No. 48, <i>Accounting for Uncertainty
      in Income Taxes &#8212; an Interpretation of FASB Statement 109</i> (&#8220;FIN 48&#8221;), which
      clarifies the accounting for uncertainty in tax positions taken or expected
      to
      be taken in a tax return, including issues relating to financial statement
      recognition and measurement. FIN 48 provides that the tax effects from an
      uncertain tax position can be recognized in the financial statements only if
      the
      position is &#8220;more-likely-than-not&#8221; of being sustained if the position were to be
      challenged by a taxing authority. The assessment of the tax position is based
      solely on the technical merits of the position, without regard to the likelihood
      that the tax position may be challenged. If an uncertain tax position meets
      the
&#8220;more-likely-than-not&#8221; threshold, the largest amount of tax benefit that is
      greater than 50 percent likely of being recognized upon ultimate settlement
      with
      the taxing authority, is recorded. The provisions of FIN 48 are effective for
      fiscal years beginning after December 15, 2006, with the cumulative effect
      of
      the change in accounting principle recorded as an adjustment to opening retained
      earnings. FIN 48 is effective for fiscal years beginning after December 15,
      2006, and will be adopted by the Company on January 1, 2007. The Company has
      not
      been able to complete its evaluation of the impact of adopting FIN 48 and as
      a
      result, is not able to estimate what effect the adoption will have on its
      financial position and results of operations, including its ability to comply
      with current debt covenants.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-17</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>2. Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      February 16, 2006, the FASB issued Statement No. 155, <i>Accounting for Certain
      Hybrid Instruments &#8212; an amendment of FASB Statements No. 133 and 140</i>. The
      statement amends Statement 133 to permit fair value measurement for certain
      hybrid financial instruments that contain an embedded derivative, provides
      additional guidance on the applicability of Statement 133 and 140 to certain
      financial instruments and subordinated concentrations of credit risk. The new
      standard is effective for the first fiscal year beginning after September 15,
      2006. We are currently evaluating the impact this new standard will have on
      our
      financial statements.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      February 2007, the FASB issued FASB Statement No. 159, The Fair Value Option
      for
      Financial Assets and Financial Liabilities &#8212; Including an Amendment of FASB
      Statement No. 115 (&#8220;SFAS 159&#8221;). The fair value option established by SFAS 159
      permits all entities to choose to measure eligible items at fair value at
      specified election dates. A business entity will report unrealized gains and
      losses on items for which the fair value option has been elected in earnings
      (or
      another performance indicator if the business entity does not report earnings)
      at each subsequent reporting date after adoption. The fair value option: (a)
      may
      be applied instrument by instrument, with a few exceptions, such as investments
      otherwise accounted for by the equity method; (b) is irrevocable (unless a
      new
      election date occurs); and (c) is applied only to entire instruments and not
      to
      portions of instruments. FASB No. 159 is effective as of the beginning of fiscal
      years beginning after November 15, 2007, but early adoption is permitted. We
      are
      currently evaluating the impact of adopting SFAS 159.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>3. Operating
      Units</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Through
      the second quarter of 2006, we conducted our continuing operating businesses
      in
      four principal areas: Oil and Gas, Gaming, Real Estate and Home Fashion. As
      described above, in November 2006, we sold our Oil and Gas operations. As a
      result, our Oil and Gas operations are now classified as discontinued operations
      and thus are not considered a reportable segment of our continuing operations.
      We now conduct our operating businesses in three principal areas: Gaming, Real
      Estate and Home Fashion.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>a.
      Gaming</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We own
      and operate gaming properties in Nevada. Our properties include the Stratosphere
      Casino Hotel and Tower, Arizona Charlie&#8217;s Decatur and Arizona Charlie&#8217;s Boulder
      in Las Vegas and the Aquarius Casino Resort in Laughlin. Results for the
      Aquarius are included from the date of its acquisition, May 19, 2006. As
      described above, in November 2006, we sold our Atlantic City gaming property.
      As
      a result, such operations are now classified as discontinued operations.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Summary
      balance sheets for our Gaming segment as of December 31, 2006 and 2005, included
      in the consolidated balance sheet, are as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="233">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="311">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="116" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="311">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="311">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="311">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">85,583</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">130,625</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="311">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment,
                net&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">422,715</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">295,432</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="311">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">44,455</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">43,719</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="311">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">552,753</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">469,776</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="311">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">54,763</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">37,890</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="311">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long
                term debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">257,329</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">217,335</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="311">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5,993</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">10,327</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="311">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">318,085</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">265,552</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-18</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>3. Operating Units
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Summarized
      income statement information for the years ended December 31, 2006, 2005 and
      2004 is as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="277">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="369">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="183" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="369">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="369">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Casino&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">220,814</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">182,938</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">167,972</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Hotel</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">75,587</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">61,862</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">54,653</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Food
                and beverage</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">83,667</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">70,060</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">66,953</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Tower,
                retail and other income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">35,912</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">35,413</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">33,778</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gross
                Revenues</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">415,980</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">350,273</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">323,356</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                promotional allowances</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">30,281</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">22,291</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">23,375</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                revenues</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">385,699</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">327,982</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">299,981</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expenses:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Casino</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">80,060</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">63,216</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">61,985</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Hotel</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">33,419</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">26,957</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">24,272</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Food
                and beverage</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">60,052</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">51,784</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">48,495</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Tower,
                retail and other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">16,856</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">15,372</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">14,035</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Selling,
                general and administrative</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">108,977</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">81,321</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">78,816</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27,620</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">22,305</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">23,516</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                costs and expenses</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">326,984</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">260,955</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">251,119</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="369">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">58,715</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">67,027</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">48,862</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>b. Real
      Estate</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our Real
      Estate operations consist of rental real estate, property development, and
      associated resort activities.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Summarized
      income statement information attributable to real estate operations is as
      follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="321">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="27">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="428">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="178" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="428">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="428">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Rental
                real estate:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                income on financing
                leases&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">6,736</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">7,299</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">9,880</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">8,177</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">7,083</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">6,686</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                development</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">90,955</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">58,270</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">27,073</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">28,707</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27,647</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">17,918</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                revenues</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">134,575</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">100,299</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">61,557</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                expenses:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                real estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">5,015</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">4,588</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">8,171</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                development</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">73,041</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">48,679</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">22,949</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">28,565</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">29,245</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">18,561</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                expenses</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">106,621</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">82,512</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">49,681</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="428">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">27,954</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">17,787</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">11,876</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 5.35pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-19</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 6.65pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div>&#160;</div>
    <div style="MARGIN: 0pt" align="center"><strong>AMERICAN REAL ESTATE HOLDINGS
      LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>3. Operating Units
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Rental Real
      Estate</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December 31, 2006, we owned 37 rental real estate properties. These primarily
      consist of fee and leasehold interests in real estate in 19 states. Most of
      these properties are net-leased to single corporate tenants. Approximately
      89%
      of these properties are currently net-leased, 3% are operating properties and
      8%
      are vacant.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Property
      Development and Associated Resort Activities</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We own,
      primarily through our Bayswater subsidiary, residential development properties.
      Bayswater, a real estate investment, management and development company, focuses
      primarily on the construction and sale of single-family houses, multi-family
      homes and lots in subdivisions and planned communities and raw land for
      residential development. Our New Seabury development property in Cape Cod,
      Massachusetts, and our Grand Harbor and Oak Harbor development property in
      Vero
      Beach, Florida each include land for future residential development of more
      than
      400 and 1,000 units of residential housing, respectively. Both developments
      operate golf and resort activities.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of real estate assets as of December 31, 2006 and 2005, included in
      the
      consolidated balance sheet, is as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="360">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="481">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="125" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="481">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="53">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="481">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="481">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                Properties:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="481">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Finance
                leases,
                net&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">66,335</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">73,292</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="481">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                leases</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">46,170</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">52,572</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="481">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                development</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">126,537</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">116,007</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="481">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                properties</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">44,932</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">46,383</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="481">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                real estate</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">283,974</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">288,254</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition to the above are properties held for sale which amounted to $23.7
      million and $27.2 million at December 31, 2006 and 2005, respectively. The
      operating results of certain of these properties are classified as discontinued
      operations.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Real Estate Leased
      to Others Accounted for Under the Financing Method</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Real
      estate leased to others accounted for under the financing method is summarized
      as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="356">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="36">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="36">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="475">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="5" valign="bottom" width="130" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="475">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="475">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="475">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minimum
                lease payments
                receivable&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">69,366</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">79,849</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="475">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Unguaranteed
                residual value</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">39,843</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">43,429</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="475">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">109,209</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">123,278</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="475">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                unearned income</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">39,341</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">46,239</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="475">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">69,868</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">77,039</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="475">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                current portion of lease amortization</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,533</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,747</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="475">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">66,335</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">73,292</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 5.35pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-20</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 6.65pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div>&#160;</div>
    <div style="MARGIN: 0pt" align="center"><strong>AMERICAN REAL ESTATE HOLDINGS
      LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>3. Operating Units
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      following is a summary of the anticipated future receipts of the minimum lease
      payments receivable at December 31, 2006 (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="301">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="27">
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2007</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">9,570</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2008</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">8,214</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2009</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">7,993</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2010</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">5,067</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2011</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">4,973</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Thereafter&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">33,549</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="402">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">69,366</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">At
      December 31, 2006 and 2005, $60.6 million and $65.4 million, respectively,
      of
      the net investment in financing leases was pledged to collateralize the payment
      of nonrecourse mortgages payable.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Real Estate Leased
      to Others Accounted for Under the Operating Method</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Real
      estate leased to others accounted for under the operating method is summarized
      as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="361">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="482">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="5" valign="bottom" width="122" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="482">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="51">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="482">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="482">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Land</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">8,605</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">12,449</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="482">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Commercial
                Buildings&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">52,246</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">58,816</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="482">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">60,851</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">71,265</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="482">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                accumulated depreciation</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">14,681</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">18,693</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="482">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">46,170</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">52,572</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      following is a summary of the anticipated future receipts of minimum lease
      payments under non-cancelable leases at December 31, 2006 (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="301">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="27">
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2007</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">11,963</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2008</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">11,637</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2009</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">10,606</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2010</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">9,532</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2011</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">8,468</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="402">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Thereafter&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24,635</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="402">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">76,841</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">At
      December 31, 2006 and 2005, $22.7 million and $21.0 million, respectively,
      of
      net real estate leased to others were pledged to collateralize the payment
      of
      non-recourse mortgages payable.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-21</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>3. Operating Units
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Property Held
      for
      Sale</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">We
      market for sale portions of our commercial real estate portfolio. Sales activity
      was as follows (in $000s, except unit data):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="309">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="13">
            </td>
            <td width="10">
            </td>
            <td width="35">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="412">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="8" valign="bottom" width="193" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="412">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="47">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="47">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="412">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="412">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Properties
                sold&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">18</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">14</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">57</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="412">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                received</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">25,340</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">52,525</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">254,424</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="412">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Mortgage
                debt repaid</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">10,702</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">93,845</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="412">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                gain recorded</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">12,776</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">16,315</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">80,459</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="412">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gain
                recorded in continuing operations</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">176</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">5,262</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="412">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gain
                recorded in discontinued operations(1)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">12,776</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">16,139</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">75,197</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 13pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 17.1pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -17.1pt">(1)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 17.1pt; MARGIN-BOTTOM: 2.5pt">In
      addition to gains on the rental portfolio of $16.1 million, a gain of $5.7
      million on the sale of a resort property was recognized in 2005.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      following is a summary of property held for sale (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="368">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="490">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="5" valign="bottom" width="114" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="490">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="490">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="490">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Leased
                to
                others&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">28,668</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">29,230</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="490">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Vacant</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,049</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="490">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">28,718</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">30,279</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="490">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                accumulated depreciation</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5,053</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,046</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="490">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">23,665</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">27,233</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">At
      December 31, 2006 and 2005, $19.8 million of real estate held for sale was
      pledged to collateralize the payment of non-recourse mortgages payable.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Other</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In July
      2004, we purchased two Vero Beach, Florida waterfront communities, Grand Harbor
      and Oak Harbor, &#8220;Grand Harbor&#8221;, including their respective golf courses, tennis
      complex, fitness center, beach club and clubhouses. The acquisition also
      included properties in various stages of development, including land for future
      residential development, improved lots and finished residential units ready
      for
      sale. The purchase price was $75.0 million, which included $62.0 million of
      land
      and construction in progress. We plan to invest in the further development
      of
      these properties and the enhancement of the existing infrastructure.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>c. Home
      Fashion</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">WPI is
      engaged in the business of manufacturing, sourcing, marketing and distributing
      bed and bath home fashion products including, among others, sheets, pillowcases,
      comforters, blankets, bedspreads, pillows, mattress pads, towels and related
      products. WPI recognizes revenue primarily through the sale of home fashion
      products to a variety of retail and institutional customers. WPI currently
      operates 32 retail outlet stores that sell home fashion products, including,
      but
      not limited to, WPI&#8217;s home fashion products. In addition, WPI receives a small
      portion of its revenues through the licensing of its trademarks.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-22</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>3. Operating Units
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Summary
      balance sheets for Home Fashion as of December 31, 2006 and 2005 as included
      in
      the consolidated balance sheets are as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="349">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="465">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,<br>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="465">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="465">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">567,419</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">560,853</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="465">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Assets
                held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">23,838</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">22,643</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="465">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">200,382</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">166,026</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="465">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38,199</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">23,402</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="465">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">829,838</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">772,924</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="465">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">101,609</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">103,931</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="465">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8,980</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5,214</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="465">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">110,589</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">109,145</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Summarized
      statement of operations for the year ended December 31, 2006 and the period
      from
      August 8, 2005 (acquisition date) to December 31, 2005 is as follows (in
      $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="336">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="41">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="48">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="448">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Year
                Ended<br>December 31,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="74" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Period<br>August
                8, 2005<br>to December
                31,<br>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="448">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="64">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">957,656</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="64">
              <div style="MARGIN: 0pt" align="right">472,681</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Costs
                and expenses:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="64">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cost
                of sales</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">901,735</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="64">
              <div style="MARGIN: 0pt" align="right">421,408</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Selling,
                general and administrative</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">160,911</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="64">
              <div style="MARGIN: 0pt" align="right">72,044</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Restructuring
                and impairment charges</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">45,647</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,658</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                costs and expenses</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,108,293</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">495,110</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                loss</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(150,637</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="64" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(22,429</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">A
      relatively small number of customers have historically accounted for a
      significant portion of WPI&#8217;s net revenue. During the year ended December 31,
      2006 and the period August 8, 2005 to December 31, 2005, sales to six customers
      amounted to approximately 49.9% of net revenues. One customer accounted for
      15%
      or more of WPI&#8217;s net revenue in both periods.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      year ended December 31, 2006, total depreciation was $31.6 million, of which
      $25.5 million was included in cost of sales and $6.1 million was included in
      selling, general and administrative expenses. Total expenses for the year
      included $33.3 million of impairment charges related to the fixed assets of
      plants that have been or will be closed and $12.3 million of restructuring
      charges (of which approximately $3.4 million relates to severance and $8.9
      million relates to continuing costs of closed plants).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Impairment
      and
      restructuring charges for the year ended December 31, 2006 are included in
      Home
      Fashion operating expenses in the accompanying consolidated statements of
      operations.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">To
      improve WPI&#8217;s competitive position, we intend to continue to restructure its
      operations to significantly reduce its cost of goods sold by closing certain
      plants located in the United States, sourcing goods from lower cost overseas
      facilities, and acquiring overseas manufacturing facilities. The Company has
      incurred impairment charges to write-down the value of WPI plants taken out
      of
      service to their estimated liquidation value. As of December 31, 2006,
      approximately $139.5 million of WPI&#8217;s assets are located outside of the United
      States, primarily in Bahrain.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-23</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>3. Operating Units
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Included
      in restructuring expenses are cash charges associated with the ongoing costs
      of
      closed plants, employee severance, benefits and related costs. The amount of
      accrued restructuring costs at December 31, 2005 was $0.1 million. During the
      year ended December 31, 2006, we incurred additional restructuring costs of
      $12.3&#160;million, of which $11.2 million was paid during the period. As of
      December 31, 2006, the accrued liability balance was $1.2 million which is
      included in accounts payable and accrued expenses in our consolidated balance
      sheet.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Total
      cumulative impairment and restructuring charges for the period from acquisition,
      August 5, 2005, through December 31, 2006, were $47.3 million.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      expect that restructuring charges will continue to be incurred throughout 2007.
      As of December 31, 2006, WPI expects to incur additional restructuring costs
      and
      impairment charges over the next year relating to the current restructuring
      plan
      of between $25.0 million and $30.0 million. Restructuring costs could be
      affected by, among other things, our decision to accelerate or delay
      restructuring efforts. As a result, actual costs incurred could vary materially
      from these amounts.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>4.
      Acquisitions</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Gaming</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">As
      described above, on May 19, 2006, our wholly-owned subsidiaries, AREP Laughlin
      and AREP Boardwalk Properties, completed the purchases of the Aquarius and
      the
      Traymore site, respectively, from affiliates of Harrah&#8217;s. The transactions were
      completed pursuant to an asset purchase agreement, dated as of November 28,
      2005, between AREP Laughlin, AREP Boardwalk LLC, Harrah&#8217;s and certain affiliates
      of Harrah&#8217;s. Under the agreement, AREP Laughlin acquired the Aquarius and AREP
      Boardwalk Properties, an assignee of AREP Boardwalk LLC, acquired the Traymore
      site for an aggregate purchase price of approximately $170 million (excluding
      transaction costs and working capital of approximately $5.7 million). On
      November 17, 2006, we sold the Traymore site to Pinnacle.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Aquarius is located on approximately 18 acres of land located next to the
      Colorado River in Laughlin, Nevada and is a tourist-oriented gaming and
      entertainment destination property. The Aquarius is the largest hotel in
      Laughlin, with 1,907 rooms in two 15-story towers, a 57,000 square-foot casino,
      five fast food franchise restaurants and four restaurants, a parking garage
      with
      capacity for 2,420 cars, over 35,000 square-feet of meeting space and a
      3,300-seat amphitheater. The property also features an outdoor pool, fitness
      center and lighted tennis courts.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      following table summarizes the estimated fair values of the net assets acquired
      on May 19, 2006 (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="279">
            </td>
            <td width="15">
            </td>
            <td width="6">
            </td>
            <td width="41">
            </td>
            <td width="15">
            </td>
            <td width="6">
            </td>
            <td width="35">
            </td>
            <td width="15">
            </td>
            <td width="6">
            </td>
            <td width="41">
            </td>
            <td width="4">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="372">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="8" valign="bottom" width="224" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>May
                19, 2006<br>Fair Value</strong></div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="372">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="63">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Aquarius</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Traymore
                Site</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Total</strong></div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="372">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="372">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">7,172</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">7,172</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="372">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Land</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">13,000</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">61,651</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">74,651</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="372">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Building
                and equipment</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">95,336</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">95,336</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="372">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intangible
                assets</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,939</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,939</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="372">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Assets
                acquired</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">118,447</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">61,651</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">180,098</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="372">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Liabilities
                assumed</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(4,874</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(4,874</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="372">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                assets acquired</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">113,573</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">61,651</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">175,224</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      purchase price allocations for the Aquarius are based on estimated fair values
      as determined by independent appraisers. If the acquisitions of the Aquarius
      and
      the Traymore site had occurred at the beginning of 2006, our consolidated
      unaudited pro forma net revenue, net income and diluted earnings per share
      for
      the year ended December 31, 2006 would not have been materially different than
      the amounts we reported, and, therefore, pro forma results are not
      presented.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-24</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>4. Acquisitions &#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      results of operations of the Aquarius from May 19, 2006 to December 31, 2006
      are
      included in the Company&#8217;s consolidated results of operations for the year ended
      December 31, 2006.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Home
      Fashion</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On August
      8, 2005, we acquired 13.2 million, or 67.7%, of the 19.5 million outstanding
      common shares of WPI. In consideration for the shares, we paid $219.9 million
      in
      cash and received the balance in respect of a portion of the debt of WestPoint
      Stevens owned by us. Pursuant to the asset purchase agreement between WPI and
      WestPoint Stevens, rights to subscribe for an additional 10.5 million shares
      of
      common stock at a price of $8.772 per share, or the rights offering, were
      allocated among former creditors of WestPoint Stevens. Under the asset purchase
      agreement and the bankruptcy court order approving the sale, we would have
      received rights to subscribe for 2.5 million of such shares and we agreed to
      purchase up to an additional 8.0 million shares of common stock to the extent
      that any rights were not exercised by the holders of such rights. Accordingly,
      upon completion of the rights offering and depending upon the extent to which
      the other holders exercise certain subscription rights, we would beneficially
      own between 15.7 million and 23.7 million shares of WPI common stock
      representing between 52.3% and 79.0% of the 30.0 million shares that would
      then
      be outstanding.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      foregoing description assumes that the subscription rights are allocated and
      exercised in the manner set forth in the asset purchase agreement and the sale
      order. However, certain of the first lien creditors of WestPoint Stevens
      appealed portions of the bankruptcy court&#8217;s ruling. In connection with that
      appeal, the subscription rights distributed to the second lien lenders at
      closing were placed in escrow. Additionally, the first lien creditors and Beal
      Bank, S.S.B have filed a complaint in Delaware seeking among other relief,
      an
      order to &#8220;unwind&#8221; the issuance of the preferred stock, or, alternatively,
      directing that such stock be held in escrow. We are vigorously contesting the
      Delaware action and any changes to the sale order. As a result of the bankruptcy
      proceedings and the Delaware proceedings, we may own less than a majority of
      WPI&#8217;s shares of common stock and our ownership of the preferred stock may also
      be affected. If we were to lose control of WPI, it &#160;could adversely affect
      WPI&#8217;s business and the value of our investment.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      December 20, 2006, we acquired (1) 1,000,000 shares of Series A-1 Preferred
      Stock for a purchase price of $100 per share, for an aggregate purchase price
      of
      $100.0 million, and (2) 1,000,000 shares of Series A-2 Preferred Stock for
      a
      purchase price of $100.0 per share, for an aggregate purchase price of $100.0
      million. Each of the Series A-1 Preferred Stock and Series A-2 Preferred Stock
      have a 4.50% annual dividend rate which is paid quarterly. For the first two
      years after issuance, the dividends are paid in the form of additional preferred
      stock. Thereafter, the dividends are to be paid in either cash or in additional
      preferred stock at the option of WPI. Each of Series A-1 Preferred Stock and
      Series A-2 Preferred Stock is convertible into common shares of WPI at a rate
      of
      $10.50 per share, subject to certain anti-dilution provisions. Assuming full
      conversion of both series of preferred stock into common shares, prior to
      completion of the rights offering, we would have owned, as of December 31,
      2006,
      32.2&#160;million shares, representing 83.7% of the 38.5 million shares that
      would then have been outstanding. Assuming the rights offering were to have
      been
      completed as of December 31, 2006, we would have owned between 32.7&#160;million
      shares or 69.5% and 34.0 million shares or 84.4% of the 47.0 million shares
      or
      40.3 million shares of WPI common stock, respectively, that would be outstanding
      depending upon the extent to which the other shareholders exercised their
      subscription rights.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      consolidated the operating results and balance sheets of WPI as of December
      31,
      2006 and 2005 and for the period from the date of acquisition through December
      31, 2006. If we were to own less than 50% of the outstanding common stock and
      lose control of WPI, we no longer would consolidate it and our financial
      statements could be materially different than those presented as of December
      31,
      2006 and 2005 and for the periods then ended.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-25</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>4. Acquisitions &#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      aggregate consideration paid for the acquisition was as follows (in
      $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="412">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="36">
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="550">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Book
                value of first and second lien
                debt&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">205,850</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="550">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                purchases of additional equity</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">187,000</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="550">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Exercise
                of rights</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">32,881</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="550">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Transaction
                costs</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,070</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="550">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">427,801</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      following table summarizes the estimated fair values of the assets acquired
      and
      liabilities assumed on August 8, 2005. The purchase price allocations are based
      on estimated fair values as determined by independent appraisers (in
      $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="285">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="36">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="381">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>August
                8,<br>2005<br>Fair Value</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Excess<br>Fair
                Value<br>Over Cost</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Basis<br>August
                8,<br>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="381">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="381">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">588,000</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">588,000</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="381">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                and equipment</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">294,360</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">(98,399</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">195,961</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="381">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intangible
                assets</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">35,700</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(12,298</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">23,402</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="381">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Assets
                acquired</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">918,060</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(110,697</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">807,363</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="381">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">111,363</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">111,363</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="381">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                liabilities</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">11,044</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">11,044</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="381">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Liabilities
                assumed</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">122,407</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">122,407</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="381">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                assets acquired</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">795,653</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(110,697</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">684,956</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="381">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interest at acquisition</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(257,155</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="381">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">427,801</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      amount allocated to intangible assets was attributed to trademarks, which have
      been determined to have an indefinite life.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our basis
      in WPI is less than our share of the equity in WPI by $110.7 million as of
      August 8, 2005. The excess of fair value over cost of net assets acquired has
      been reflected as a reduction of long-lived assets in our consolidated balance
      sheet. Fixed assets were reduced by $98.4 million and intangible assets were
      reduced by $12.3&#160;million. As a result, the financial statements of WPI
      presented herein could be materially different from the results reflected in
      the
      books and records of WPI.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      following table summarizes unaudited pro forma financial information assuming
      the acquisition of WPI had occurred on January 1, 2004. This unaudited pro
      forma
      financial information does not necessarily represent what would have occurred
      if
      the transaction had taken place on the dates presented and should not be taken
      as representative of our future consolidated results of operations or financial
      position.</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="197">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="37">
            </td>
            <td width="14">
            </td>
            <td width="8">
            </td>
            <td width="63">
            </td>
            <td width="14">
            </td>
            <td width="6">
            </td>
            <td width="36">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="47">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="262">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td colspan="11" valign="bottom" width="337" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Twelve
                Months Ended December 31,
                2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="262">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="57">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>AREH</strong></div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="95">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>WPI</strong></div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="58">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
                Forma<br>Adjustments</strong></div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="70" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Total</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="262">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="95" style="border-top: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(January
                1, 2005<br>to August 7, 2005)</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="9" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="262">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td colspan="11" valign="bottom" width="337">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(In
                $000s)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="262">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">900,962</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="84" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">728,362</div>
            </td>
            <td valign="top" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="top" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,629,324</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="262">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">(Loss)
                income from continuing operations</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(16,900</div>
            </td>
            <td valign="top" width="18" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="84" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(157,935</div>
            </td>
            <td valign="top" width="19" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">98,487</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(76,348</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 5.35pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-26</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 6.65pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>AMERICAN REAL ESTATE HOLDINGS
      LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>4. Acquisitions
&#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="220">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="36">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="44">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="42">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="44">
            </td>
            <td width="1">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="294">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td colspan="11" valign="bottom" width="310" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Twelve
                Months Ended December 31,
                2004</strong></div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="294">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>AREH</strong></div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>WPI</strong></div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pro
                Forma<br>Adjustments</strong></div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Total</strong></div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="294">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td colspan="11" valign="bottom" width="310">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(In
                $000s)</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="294">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">361,538</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,618,684</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,980,222</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="294">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) income from continuing operations</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">70,287</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(183,275</div>
            </td>
            <td valign="top" width="18" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">178,954</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">65,966</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The pro
      forma adjustments relate, principally, to the elimination of interest expense,
      bankruptcy expense and other expenses at WPI, a reduction in interest income
      of
      AREH and adjustments to reflect AREH&#8217;s depreciation expense based on values
      assigned in applying purchase accounting. WPI balances included in the pro
      forma
      table for the twelve months ended December 31, 2004 are derived from the audited
      financial statements of WestPoint for that period. Unaudited WPI balances
      included in the pro forma table for the twelve months ended December 31, 2005
      are for the period from January 1, 2005 to August 7, 2005. Data for the period
      from August 8, 2005, the acquisition date, to December 31, 2005 are included
      in
      AREH&#8217;s results.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      discussed in Note 20, legal proceedings with respect to the acquisition are
      ongoing.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>5. Discontinued
      Operations and Assets Held for Sale</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>The Sands and
      Related Assets</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      November 17, 2006, Atlantic Coast, ACE, AREH, and certain other entities owned
      by or affiliated with AREH completed the sale to Pinnacle of the outstanding
      membership interests in ACE and 100% of the equity interests in certain
      subsidiaries of AREH which own parcels of real estate adjacent to The Sands,
      including 7.7 acres of land adjacent to The Sands known as the Traymore site.
      We
      own, through subsidiaries, approximately 67.6% of Atlantic Coast, which owned
      100% of ACE. The aggregate price was approximately $274.8 million, of which
      approximately $200.6 million was paid to Atlantic Coast and approximately $74.2
      million was paid to affiliates of AREH for subsidiaries which own the Traymore
      site and the adjacent properties. Under the terms of the agreement, $50.0
      million of the purchase price paid to Atlantic Coast was deposited into escrow
      to fund indemnification obligations with regard to the GBH creditors&#8217; claims. In
      February 2007 we resolved all outstanding litigation involving our interest
      in
      our Atlantic City gaming operations. See Note 20. Subsequent Events.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Oil and Gas
      Operations</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      November 21, 2006, our indirect wholly-owned subsidiary, AREP O &amp; G
      Holdings, consummated the sale of all of the issued and outstanding membership
      interests of NEG Oil &amp; Gas to SandRidge, for consideration consisting of
      $1.025 billion in cash, 12,842,000 shares of SandRidge&#8217;s common stock, valued,
      at the date of closing, at $18 per share, and the repayment by SandRidge of
      $300.0 million of debt of NEG Oil &amp; Gas.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">SandRidge
      is a working interest owner and the operator of a majority of the Longfellow
      Ranch area oil and gas properties. The interest in Longfellow Ranch was the
      single largest oil and gas property owned by NEG Oil &amp; Gas.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      November 21, 2006, pursuant to an agreement dated October 25, 2006 among AREH,
      NEG Oil &amp; Gas and NEGI, NEGI`1 sold its membership interest in NEG Holding
      to NEG Oil &amp; Gas for consideration of approximately $261.1 million. Of that
      amount, $149.6 million was used to repay the principal of and accrued interest
      with respect to the NEGI 10.75% senior notes due 2007, all of which was held
      by
      us.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Real
      Estate</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Certain
      of our real estate properties are classified as discontinued operations. The
      properties classified as discontinued operations have changed during 2006 and,
      accordingly, certain amounts in the accompanying 2005 and 2004 financial
      statements have been reclassified to conform to the current classification
      of
      properties.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-27</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>5. Discontinued
      Operations and Assets Held for Sale &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Results of
      Operations and Assets Held for Sale</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      financial position and results of our Oil and Gas, Real Estate and our Atlantic
      City Gaming operations described above are presented as assets and liabilities
      of discontinued operations held for sale in the consolidated balance sheets
      and
      discontinued operations in the consolidated statements of operations,
      respectively, for all periods presented in accordance with SFAS No. 144.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of the results of operations for our discontinued operations for years
      ended December 31, 2006, 2005 and 2004 is as follows (in $000&#8217;s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="303">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="8" valign="bottom" width="196" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="53">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="53">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Oil
                and gas</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">353,539</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">198,854</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">137,988</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Atlantic
                City gaming</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">138,378</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">162,339</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">170,855</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                estate</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5,143</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,940</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">20,757</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                revenues</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">497,060</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">368,133</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">329,600</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                operating income (loss):</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Oil
                and gas</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">183,281</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">37,521</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">33,053</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Atlantic
                City Gaming</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(13,091</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(6,848</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">2,373</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                estate</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,144</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,179</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">11,294</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                operating income</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">174,334</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">34,852</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">46,720</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(26,266</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(14,005</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(18,303</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                and other income</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">11,004</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">5,897</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">6,703</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Impairment
                loss on GBH bankruptcy</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(52,366</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(15,600</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) from discontinued operation before income taxes and<br>minority
                interest</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">159,072</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(25,622</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">19,520</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                tax (expense) benefit</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(4,241</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(2,922</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(8,213</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                (loss) from discontinued operations</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">154,831</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(28,544</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">11,307</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gain
                on sales of discontinued operations, net of income tax expense
                of<br>$22,637 in 2006</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">676,444</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">21,849</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">75,197</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(55,511</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,682</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,074</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">775,764</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(3,013</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">88,578</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Derivative
      Contracts</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">We
      record derivative contracts as assets or liabilities in the balance sheet at
      fair value. As of December 31, 2005, these derivatives were recorded as a
      liability of discontinued operations held for sale of $85.0 million. We have
      elected not to designate any of these instruments as hedges for accounting
      purposes and, accordingly, both realized and unrealized gains and losses are
      included in the oil and gas revenues for discontinued operations. Our realized
      and unrealized losses on our derivative contracts for the periods indicated
      were
      as follows (in $000&#8217;s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="287">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="17">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
            <td width="17">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="383">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="8" valign="bottom" width="216" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Years
                Ended December 31,</strong></div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="383">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="53">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="23">&#160;</td>
            <td colspan="2" valign="bottom" width="61">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="23">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="383">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="23">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="23">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="383">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Realized
                loss (net cash
                payments)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(25,948</div>
            </td>
            <td valign="bottom" width="23">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(51,263</div>
            </td>
            <td valign="bottom" width="23">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(16,625</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="383">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Unrealized
                gain (loss)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">99,707</div>
            </td>
            <td valign="bottom" width="23">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(69,254</div>
            </td>
            <td valign="bottom" width="23">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(9,179</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="383">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">73,759</div>
            </td>
            <td valign="bottom" width="23">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(120,517</div>
            </td>
            <td valign="bottom" width="23" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(25,804</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 5.35pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-28</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 6.65pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div>&#160;</div>
    <div style="MARGIN: 0pt" align="center"><strong>AMERICAN REAL ESTATE HOLDINGS
      LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>5. Discontinued
      Operations and Assets Held for Sale &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>GBH Impairment</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      September 29, 2005, GBH filed a voluntary petition for bankruptcy relief under
      Chapter 11 of the U.S. Bankruptcy Code. As a result of this filing, we
      determined that we no longer control GBH and have deconsolidated our investment
      effective the date of the bankruptcy filing. As a result of GBH&#8217;s bankruptcy, we
      recorded impairment charges of $52.4 million related to the write-off of the
      remaining carrying amount of our investment ($6.7 million) and also to reflect
      a
      dilution in our effective ownership percentage of Atlantic Coast, 41.7% of
      which
      is owned directly by GBH ($45.7 million).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In the
      year ended December 31, 2004, we recorded an impairment loss of $15.6 million
      on
      our equity investment in GBH. The purchase price pursuant to an agreement to
      purchase additional shares of GBH in 2005 indicated that the fair value of
      our
      investment was less than our carrying value. An impairment charge was recorded
      to reduce the carrying value to the value implicit in the purchase
      agreement.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      recorded $34.5 million of income tax benefits in the third quarter of 2006
      as a
      result of the reversal of deferred tax valuation allowances for our oil and
      gas
      and Atlantic City gaming operations. See Note 16, Income Taxes, for further
      information.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of assets held for sale and liabilities of discontinued operations
      held
      for sale as of December 31, 2006 and 2005 is as follows (in $000&#8217;s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="355">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="474">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="133" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="474">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="56">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="474">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="56" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash
                equivalents&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">116,032</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Trade,
                notes and other receivables</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">57,133</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                current assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">47,503</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">73,125</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">888,086</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">43,021</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Assets
                held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">47,503</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,177,397</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable and accrued expenses</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">118,468</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">306,052</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                non-current liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">65,078</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Liabilities
                of discontinued operations held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">489,598</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Oil and Gas
      Disclosures</i></strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Capitalized Costs</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Capitalized
      costs as of December 31, 2005 relating to oil and gas producing activities
      are
      as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="408">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="41">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="544">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,<br>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="544">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="544">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proved
                properties&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">1,229,923</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="544">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                property and equipment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,029</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="544">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">1,235,952</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="544">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less:
                Accumulated depreciation, depletion and amortization</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">493,493</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="544">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">742,459</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 5.35pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-29</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 6.65pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div>&#160;</div>
    <div style="MARGIN: 0pt" align="center"><strong>AMERICAN REAL ESTATE HOLDINGS
      LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>5. Discontinued
      Operations and Assets Held for Sale &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Costs
      incurred in connection with property acquisition, exploration and development
      activities for the period from January 1, 2006 to November 21, 2006 and the
      years ended December 31, 2005 and 2004 were as follows (in $000s, except
      depletion rate):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="300">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="43">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="400">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>January
                1 &#8211;<br>November 21,</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="122" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Years
                Ended<br>December 31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="400">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="66">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="52">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="400">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="400">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Acquisitions&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">14,113</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">114,244</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">128,673</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="400">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Exploration
                costs</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">83,463</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">75,357</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">62,209</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="400">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Development
                costs</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">133,459</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">124,305</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">52,765</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="400">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">231,035</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">313,906</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">243,647</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="400">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depletion
                rate per Mcfe</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2.10</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2.33</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2.11</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December 31, 2005, all capitalized costs relating to oil and gas activities
      have
      been included in the full cost pool.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Supplemental Reserve
      Information (Unaudited)</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      accompanying tables present information concerning our oil and natural gas
      producing activities during the period from January 1, 2006 to November 21,
      2006
      and the years ended December 31, 2005 and 2004 and are prepared in accordance
      with SFAS No. 69, <i>Disclosures about Oil and Gas Producing
      Activities</i>.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Estimates
      of our proved reserves and proved developed reserves were prepared by
      independent firms of petroleum engineers, based on data supplied to them by
      NEG
      Oil &amp; Gas. Estimates relating to oil and gas reserves are inherently
      imprecise and may be subject to substantial revisions due to changing prices
      and
      new information, such as reservoir performance, production data, additional
      drilling and other factors becomes available.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-30</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>5. Discontinued
      Operations and Assets Held for Sale &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Proved
      reserves are estimated quantities of oil, natural gas, condensate and natural
      gas liquids which geological and engineering data demonstrate with reasonable
      certainty to be recoverable in future years from known reservoirs under existing
      economic and operating conditions. Natural gas liquids and condensate are
      included in oil reserves. Proved developed reserves are those proved reserves
      that can be expected to be recovered through existing wells with existing
      equipment and operating methods. Proved undeveloped reserves include those
      reserves expected to be recovered from new wells on undrilled acreage or
      existing wells on which a relatively major expenditure is required for
      recompletion. Natural gas quantities represent gas volumes which include amounts
      that will be extracted as natural gas liquids. Our estimated net proved reserves
      and proved developed reserves of oil and condensate and natural gas for the
      period from January 1, 2006 to November 21, 2006 and the years ended December
      31, 2005 and 2004 were as follows:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="324">
            </td>
            <td width="13">
            </td>
            <td width="53">
            </td>
            <td width="13">
            </td>
            <td width="58">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="432">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Crude
                Oil</strong></div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Natural
                Gas</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="432">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td valign="top" width="71">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(Barrels)</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(Thousand<br>cubic
                feet)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="432">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">December
                31, 2003</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">8,165,562</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">206,259,821</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Reserves
                of National Offshore purchased from affiliate of general partner</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">5,203,599</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">25,981,749</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Sales
                of reserves in place</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">(15,643</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">(344,271</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Extensions
                and discoveries</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">524,089</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">50,226,279</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revisions
                of previous estimates</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">204,272</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">9,810,665</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Production</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,484,005</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="78" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(18,895,077</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">December
                31, 2004</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">12,597,874</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">273,039,166</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Purchase
                of reserves in place</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">483,108</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">94,937,034</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Sales
                of reserves in place</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">(624,507</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">(7,426,216</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Extensions
                and discoveries</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">743,019</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">79,591,588</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revisions
                of previous estimates</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">494,606</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">17,015,533</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Production</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,789,961</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="78" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(28,106,819</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">December
                31, 2005</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">11,904,139</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">429,050,286</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Purchase
                of reserves in place</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">282,267</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">9,597,085</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Extensions
                and discoveries</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">2,169,222</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">73,753,558</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revisions
                of previous estimates</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">(201,907</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">(58,470,950</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Production</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">(1,655,516</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">(31,094,079</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Sale
                of properties to SandRidge</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(12,498,206</div>
            </td>
            <td valign="top" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="78" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(422,835,900</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">November
                21, 2006</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="432">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proved
                developed reserves:</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71">&#160;</td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">December
                31, 2004</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">8,955,300</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">151,765,372</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="432">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">December
                31, 2005</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="71" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">8,340,077</div>
            </td>
            <td valign="top" width="18">&#160;</td>
            <td valign="bottom" width="78" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">200,519,972</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Asset Retirement
      Obligations &#8212; Oil and Gas</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our asset
      retirement obligations represent expected future costs to plug and abandon
      our
      wells, dismantle facilities, and reclamate sites at the end of the related
      assets&#8217; useful lives.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-31</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>5. Discontinued
      Operations and Assets Held for Sale &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">As
      of
      December 31, 2005, we had $24.3 million held in various escrow accounts relating
      to the asset retirement obligations for certain offshore properties. The escrow
      accounts and the asset retirement obligations were transferred to the purchaser
      in connection with the sale of our Oil and Gas business. The following table
      summarizes changes in the Company&#8217;s asset retirement obligations during the
      period from January 1, 2006 to November 21, 2006 and the year ended December
      31,
      2005 (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="338">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="42">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="41">
            </td>
            <td width="5">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="451">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>January
                1 &#8211;<br>November 21,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Year
                Ended<br>December 31, <br>2005</strong></div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="451">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Beginning
                of
                year&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">41,228</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">56,524</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Add:
                Accretion</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">2,537</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">3,019</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Drilling
                additions/Purchases</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">4,269</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">2,067</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less:
                Revisions</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(2,813</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Settlements</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(431</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Dispositions</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(48,034</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(17,138</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">End
                of period</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">41,228</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>6. Related Party
      Transactions</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      entered into several transactions with entities affiliated with Mr.&#160;Icahn.
      The transactions include purchases by us of businesses and business interests,
      including debt, of the affiliated entities. Additionally, other transactions
      have occurred as described below.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">All
      related party transactions are reviewed and approved by our Audit Committee.
      Where appropriate, our Audit Committee will obtain independent financial advice
      and counsel on the transactions.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      accordance with generally accepted accounting principles, assets transferred
      between entities under common control are accounted for at historical cost
      similar to a pooling of interest, and the financial statements of previously
      separate companies for periods prior to the acquisition are restated on a
      combined basis. Additionally, the earnings, losses, capital contribution and
      distributions of the acquired entities are allocated to the general partner
      as
      an adjustment to equity, as is the difference between the consideration paid
      and
      the book basis of the entity acquired.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>a.
      Acquisitions</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Oil and
      Gas</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      October 2003, pursuant to a purchase agreement dated as of May 16, 2003, we
      acquired certain debt and equity securities of NEGI from entities affiliated
      with Mr.&#160;Icahn for an aggregate cash consideration of $148.1 million plus
      $6.7 million in cash for accrued interest on the debt securities. The securities
      acquired were $148.6 million in principal amount of outstanding 10.75% senior
      notes due 2006 of NEGI and 5,584,044 shares of common stock of NEGI. As a result
      of the foregoing transaction and the acquisition by us of additional securities
      of NEGI prior to the closing, we beneficially owned in excess of 50% of the
      outstanding common stock of NEGI. In connection with the acquisition of stock
      in
      NEGI, the excess of cash disbursed over the historical cost, which amounted
      to
      $2.8 million, was charged to the general partner&#8217;s equity. NEGI owned a 50%
      interest in NEG Holdings; the other 50% interest in NEG Holdings was held by
      an
      affiliate of Mr.&#160;Icahn prior to our acquisition of the interest during the
      second quarter of 2005. NEG Holdings owned NEG Operating LLC (&#8220;Operating LLC&#8221;)
      which owned operating oil and gas properties managed by NEGI.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-32</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>6. Related Party
      Transactions &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      December 6, 2004, we purchased from affiliates of Mr.&#160;Icahn $27.5 million
      aggregate principal amount, or 100% of the outstanding term notes issued by
      TransTexas, (the &#8220;TransTexas Notes&#8221;). The purchase price was $28.2 million in
      cash, which equaled the principal amount of the TransTexas Notes plus accrued
      but unpaid interest.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      December 2004, we purchased all of the membership interests of MidRiver LLC,
      or
      MidRiver, from affiliates of Mr.&#160;Icahn for an aggregate purchase price of
      $38.0 million. The assets of Mid River consist of $38.0 million principal amount
      of term loans of Panaco.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      January 2005, we entered into an agreement to acquire TransTexas (subsequently
      known as National Onshore), Panaco (subsequently known as National Offshore)
      and
      the membership interest in NEG Holdings other than that already owned by NEGI
      for cash consideration of $180.0 million and depositary units valued, in the
      aggregate, at $445.0 million, from affiliates of Mr.&#160;Icahn. The acquisition
      of TransTexas was completed on April 6, 2005 for $180.0 million in cash. The
      acquisition of Panaco and the membership interest in NEG Holdings was completed
      on June 30, 2005 for 15,344,753 depository units, valued at $445.0
      million.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      discussed above, on November 21, 2006, our indirect wholly-owned subsidiary,
      AREP O &amp; G Holdings, consummated the sale of all of the issued and
      outstanding membership interests of NEG Oil &amp; Gas to SandRidge. See Note 5
      for additional information regarding the sale.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Gaming</i></strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Las Vegas
      Properties</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      January 2004, ACEP entered into an agreement to acquire Arizona Charlie&#8217;s
      Decatur and Arizona Charlie&#8217;s Boulder, from Mr.&#160;Icahn and an entity
      affiliated with Mr.&#160;Icahn, for aggregate consideration of $125.9 million.
      The acquisition was completed on May 26, 2004.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Atlantic City
      Property</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In 1998
      and 1999, we acquired an interest in The Sands, by purchasing the principal
      amount of $31.4 million of first mortgage notes issued by GB Property Funding
      Corp. or GB Property. The purchase price for the notes was $25.3 million. GB
      Property was organized as a special purpose entity by Greate Bay Hotel and
      Casino, Inc. or Greate Bay for the purpose of borrowing funds. Greate Bay was
      a
      wholly-owned subsidiary of GBH. An affiliate of the general partner also made
      an
      investment. A total of $185.0 million in notes were issued.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      January 1998, GB Property and Greate Bay filed for bankruptcy protection under
      Chapter 11 of the Bankruptcy Code to restructure its long-term debt.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In July
      2000, the U.S. Bankruptcy Court ruled in favor of the reorganization plan
      proposed by affiliates of the general partner which provided for an additional
      investment of $65.0 million by the Icahn affiliates in exchange for a 46% equity
      interest in GBH, with bondholders (which also included the Icahn affiliates)
      to
      receive $110.0 million principal amount of new notes of GB Property First
      Mortgage, or the GB Notes, and a 54% equity interest in GBH. Interest on the
      GB
      Notes was payable at the rate of 11% per annum on March 29 and September 29,
      beginning March 29, 2001. The outstanding principal was due September 29, 2005.
      The principal and interest that was due on September 29, 2005 was not paid.
      On
      September 29, 2005, GBH filed for bankruptcy for protection under Chapter 11
      of
      the Bankruptcy Code.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Until
      July 22, 2004, Greate Bay was the owner and operator of The Sands. Atlantic
      Coast was a wholly-owned subsidiary of Greate Bay which was a wholly-owned
      subsidiary of GBH. ACE is a wholly-owned subsidiary of Atlantic Coast. Atlantic
      Coast and ACE were formed in connection with a transaction (the &#8220;Transaction&#8221;),
      which included a Consent Solicitation and Offer to Exchange in which holders
      of
      the GB Notes were given the opportunity to exchange such notes, on a dollar
      for
      dollar basis, for $110.0 million of 3% Notes due 2008 (the &#8220;3% &#160;Notes&#8221;),
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-33</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>6. Related Party
      Transactions &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">issued by Atlantic Coast.
      The Transaction and the Consent Solicitation and Offer to Exchange were
      consummated on July 22, 2004, and holders of $66.3 million of GB Notes exchanged
      such notes for $66.3 million Atlantic Coast 3% Notes. Also on July 22, 2004,
      in
      connection with the Consent Solicitation and Offer to Exchange, the indenture
      governing the GB Notes was amended to eliminate certain covenants and to release
      the liens on the collateral securing such notes. The Transaction included,
      among
      other things, the transfer of substantially all of the assets of GBH to Atlantic
      Coast.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Atlantic Coast 3% Notes are guaranteed by ACE. Also on July 22, 2004, in
      connection with the consummation of the Transaction and the Consent Solicitation
      and Offer to Exchange, GB Property and Greate Bay merged into GBH, with GBH
      as
      the surviving entity. In connection with the transfer of the assets and certain
      liabilities of GBH, including the assets and certain liabilities of Greate
      Bay,
      Atlantic Coast issued 2,882,937 shares of common stock, par value $0.01 per
      share, to Greate Bay which, following the merger of Greate Bay became the sole
      asset of GBH. Substantially all of the assets and liabilities of GBH and Greate
      Bay (with the exception of the remaining GB Notes and accrued interest thereon,
      the Atlantic Coast Common Stock, and the related pro rata share of deferred
      financing costs) were transferred to Atlantic Coast or ACE. As part of the
      Transaction, an aggregate of 10,000,000 warrants were distributed on a pro
      rata
      basis to the stockholders of GBH upon the consummation of the Transaction.
      Such
      warrants allow the holders to purchase from Atlantic Coast at an exercise price
      of $0.01 per share, an aggregate of 2,750,000 shares of Atlantic Coast Common
      Stock and are only exercisable following the earlier of (a) either the 3% Notes
      being paid in cash or upon conversion, in whole or in part, into Atlantic Coast
      Common Stock, (b) payment in full of the outstanding principal of the GB Notes
      exchanged, or (c) a determination by a majority of the board of directors of
      Atlantic Coast (including at least one independent director of Atlantic Coast)
      that the Warrants may be exercised. A gaming license to operate The Sands was
      granted to ACE by the New Jersey Casino Control Commission.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      December 27, 2004, we purchased $37.0 million principal amount of Atlantic
      Coast
      3% Notes from two Icahn affiliates for cash consideration of $36.0 million.
      We
      already owned $26.9 million principal amount of 3% Notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On May
      17, 2005, we (1) converted $28.8 million in principal amount of 3% Notes into
      1,891,181 shares of Atlantic Coast common stock and (2) exercised warrants
      to
      acquire 997,620 shares of Atlantic Coast common stock. Also on May 17, 2005,
      affiliates of Mr.&#160;Icahn exercised warrants to acquire 1,133,284 shares of
      Atlantic Coast common stock. Prior to May 17, 2005, GBH owned 100% of the
      outstanding Common Stock of Atlantic Coast.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On June
      30, 2005, we completed the purchase of 4,121,033 shares of common stock of
      GBH
      and 1,133,284 shares of Atlantic Coast from affiliates of Mr.&#160;Icahn in
      consideration of 413,793 of our depositary units. The agreement provided that
      up
      to an additional 206,897 depositary units could be issued if Atlantic Coast
      met
      certain earnings targets during 2005 and 2006. The depositary units issued
      in
      consideration for the acquisitions were valued at $12.0 million. Based on the
      2005 and 2006 operating performance of The Sands, no additional depositary
      units
      have been issued.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">After
      the
      purchases from affiliates of Mr.&#160;Icahn, we owned 77.5% of the common stock
      of GBH and 58.2% of the common stock of Atlantic Coast. As a result, we obtained
      control of GBH and Atlantic Coast. The period of common control for GBH and
      Atlantic Coast began prior to January 1, 2002. The financial statements give
      retroactive effect to the consolidation of GBH and Atlantic Coast. We had
      previously accounted for GBH on the equity method. On September 29, 2005, GBH
      filed for bankruptcy.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      November 17, 2006, we completed the sale to Pinnacle of the outstanding
      membership interests in ACE which owns The Sands and 100% of the equity
      interests in certain subsidiaries of AREH which own parcels of real estate
      adjacent to The Sands, including the Traymore site. See Note 5 for additional
      information regarding the sale.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-34</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>6. Related Party
      Transactions &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>b. Administrative
      Services</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In 1997,
      we entered into a license agreement with an affiliate of API for office space.
      The license agreement expired in June 2005. In July 2005, we entered into a
      new
      license agreement with an API affiliate for the non-exclusive use of
      approximately 1,514 square feet for which we pay monthly base rent of $13,000
      plus 16.4% of certain &#8220;additional rent.&#8221; The license agreement expires in May
      2012. Under the agreement, base rent is subject to increases in July 2008 and
      December 2011. Additionally, we are entitled to certain annual rent credits
      each
      December beginning December 2005 and continuing through December 2011. For
      the
      years ended December 31, 2006, 2005 and 2004, we paid such affiliate $162,000,
      $138,000 and $162,000, respectively, in connection with this licensing
      agreement.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">An
      affiliate occupies a portion of certain office space leased by us. Monthly
      payments from the affiliate for the use of the space began on October 12, 2006.
      For the period beginning October 12, 2006 and ending December 31, 2006, we
      received $17,000 for the use of such space.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      years ended December 31, 2006, 2005 and 2004, we paid $783,000, $1,016,000
      and
      $506,000, respectively, to XO Holdings, Inc., formerly known as XO
      Communications, Inc., an affiliate of the general partner, for telecommunication
      services.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">An
      affiliate of the general partner provided certain professional services to
      us
      for which we incurred charges from the affiliate of $344,986 and $81,600 for
      the
      years ended December 31, 2005 and 2004, respectively. No charges were incurred
      in 2006.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      provided certain professional services to an affiliate of the general partner
      for which we charged $695,000, $324,548 and $80,000 for the years ended December
      31, 2006, 2005 and 2004, respectively. In October 2006, an affiliate remitted
      $355,691 to us as an advance payment for future services. As of December 31,
      2006, current liabilities in the consolidated balance sheet included $287,380
      to
      be applied to our charges to the affiliate for services to be supplied to
      it.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">An
      affiliate provided certain professional services to WPI for which it incurred
      charges of approximately $218,000 for the year ended December 31, 2006.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>c. Related Party
      Debt
      Transactions</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      connection with TransTexas&#8217; plan of reorganization on September 1, 2003,
      TransTexas as borrower, entered into the Restructured Oil and Gas (O&amp;G) Note
      with Thornwood, an affiliate of Mr.&#160;Icahn, as lender. The Restructured
      O&amp;G Note was a term loan in the amount of $32.5 million with interest at a
      rate of 10% per annum. Interest was payable semi-annually commencing six months
      after the effective date. Annual principal payments in the amount of $5.0
      million was due on the first through fourth anniversary dates of the effective
      date with the final principal payment of $12.5 million due on the fifth
      anniversary of the effective date. The Restructured O&amp;G Note was purchased
      by us in December 2004 and is eliminated in consolidation.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">During
      fiscal year 2002, Fresca, LLC, which was acquired by American Casino in May
      2004, entered into an unsecured line of credit in the amount of $25.0 million
      with Starfire Holding Corporation, or Starfire, an affiliate of Mr.&#160;Icahn.
      The outstanding balance, including accrued interest, was due and payable on
      January 2, 2007. As of December 31, 2003, Fresca, LLC had $25.0 million
      outstanding. The note bore interest on the unpaid principal balance from January
      2, 2002 until maturity at the rate per annum equal to the prime rate, as
      established by Fleet Bank, from time to time, plus 2.75%. Interest was payable
      semi-annually in arrears on the first day of January and July, and at maturity.
      The note was guaranteed by Mr.&#160;Icahn. The note was repaid during May 2004.
      The interest rate at December 31, 2003 was 6.75%.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-35</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>7. Investments and
      Related Matters</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Investments
      consist of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="258">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="344">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="122" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31, 2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="121" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31, 2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="344">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="52">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Amortized</strong></div>
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Cost</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="52">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Carrying</strong></div>
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Value</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="52">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Amortized</strong></div>
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Cost</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Carrying</strong></div>
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Value</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="344">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="344">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                Investments:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="344">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><i>Trading</i></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="344">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Marketable
                equity and debt
                securities&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">33,301</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">39,232</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="344">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                investments</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">20,538</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="344">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                current trading</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">20,538</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">33,301</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">39,232</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="344">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><i>Available
                for Sale</i></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="344">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">U.S.
                Government and agency obligations</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">3,346</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">3,346</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="344">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Marketable
                equity and debt securities</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">242,080</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">265,411</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">650,986</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">646,666</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="344">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                securities</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">251,131</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">253,166</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">31,282</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">31,282</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="344">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                current available for sale</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">493,211</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">518,577</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">685,614</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">681,294</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="344">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                current investments</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">493,211</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">539,115</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">718,915</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">720,526</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Proceeds
      from the sales of available for sale securities were $726,807, $96,848 and
      $82,300 for the years ended December 31, 2006, 2005 and 2004, respectively.
      The
      gross realized gains on available for sale securities sold for the years ended
      December 31, 2006, 2005 and 2004 were $47,522, $8,552 and $37,200, respectively.
      For purposes of determining gains and losses, the cost of securities is based
      on
      specific identification. Net unrealized holding gains (losses) on available
      for
      sale securities in the amount of $29,684, $(4,197) and $(9,535) for the years
      ended December 31, 2006, 2005 and 2004, respectively, have been included in
      accumulated other comprehensive income.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In the
      third quarter of 2005, we began using the services of an unaffiliated third
      party investment manager to manage certain fixed income investments. At December
      31, 2006 and 2005, $163.7 million and $448.8 million, respectively, had been
      invested at the discretion of such manager in a diversified portfolio consisting
      predominantly of short-term investment grade debt securities. Investments
      managed by the third party investment manager are classified as available for
      sale securities in the accompanying consolidated balance sheets. As of December
      31, 2006, accrued expenses and other current liabilities included $46.4 million
      relating to unsettled trades of securities.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Included
      in other securities are 12,842,000 shares of SandRidge&#8217;s common stock, received
      as consideration for the sale of our Oil &amp; Gas operations, and which are
      valued at $231.2 million as of December 31, 2006. There is no readily available
      market for such securities.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Investment in
      ImClone Systems Incorporated</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      described in Note 2 above, in the fourth quarter of 2006 we changed our method
      of accounting for our investment in ImClone Systems Incorporated to the equity
      method of accounting. As a result, the financial statements of prior years
      have
      been adjusted to apply the new method retrospectively.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">The effect of the change
      increased our 2006 net income by $12.6 million. The financial statements for
      2005 have been retrospectively adjusted for the change, which resulted in an
      increase of net income for 2005 of $1.4 million. The cumulative effect of the
      change resulted in an increase and decrease in our total partners&#8217; equity by
      $42.2 million and $2.9 million at December 31, 2006 and 2005, respectively,
      as a
      result of &#160;recording our proportionate share of ImClone&#8217;s net income, other
      comprehensive income and other changes in ImClone&#8217;s stockholders&#8217; equity.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-36</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>7. Investments and
      Related Matters &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">At
      December 31, 2006 and 2005 our carrying value of our equity investment in
      ImClone was $164.3 million and $97.3 million, respectively. As of December
      31,
      2006, the market value of our ImClone shares held was $122.2 million. As of
      September 30, 2006 our underlying equity in the net assets of ImClone was
      approximately $36.3 million. While we recognize that the carrying value of
      our
      investment in ImClone as of December 31, 2006 is greater than the market value
      of our shares held, we do not believe that this is an other than temporary
      decline and accordingly no impairment has been recognized.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      equity method of accounting requires an evaluation comparing the company&#8217;s
      investment to the fair value of ImClone&#8217;s underlying net assets at each
      acquisition date. Since the Company changed its method of accounting in the
      fourth quarter of 2006, we have not yet been able to evaluate all of the factors
      required in order to complete this analysis. We anticipate that such evaluation
      will be completed in 2007.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      combined results of operations and financial position of ImClone for the periods
      indicated are as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="297">
            </td>
            <td width="13">
            </td>
            <td width="8">
            </td>
            <td width="64">
            </td>
            <td width="13">
            </td>
            <td width="7">
            </td>
            <td width="62">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="396">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="97" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Nine
                Months<br>Ended<br>September 30,
                2006</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="93" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Year
                Ended<br>December 31, 2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="396">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="86">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="83">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Condensed
                Income Statement Information:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="86">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="83">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                Sales&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="86" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">545,684</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="83" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">383,673</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                Income</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="86" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">240,196</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="83" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">66,779</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                Income</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="86" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">324,116</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="83" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">86,496</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Condensed
                Balance Sheet Information:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="86">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="83">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                Assets</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="right">1,187,060</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="83">
              <div style="MARGIN: 0pt" align="right">909,118</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Non-Current
                Assets</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="86" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">597,728</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="83" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">434,297</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                Assets</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="86" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,784,788</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="83" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,343,415</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                Liabilities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="right">237,304</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="83">
              <div style="MARGIN: 0pt" align="right">242,119</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Non-Current
                Liabilities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="right">874,900</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="83">
              <div style="MARGIN: 0pt" align="right">848,892</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="86" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">672,584</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="83" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">252,404</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                Liabilities and Equity</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="86" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,784,788</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="83" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,343,415</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Other
      Investments</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      carrying value of other noncurrent investments was $13.4 million and $0.8
      million as of December 31, 2006 and 2005, respectively. Included in other
      securities is an investment of 4.4% of the common stock of Philip Services
      Corp., an entity controlled by related parties. The investment has a cost basis
      of $0.7 million, which is net of significant impairment charges taken in prior
      years.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Margin Liability
      on
      Marketable Securities</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">At
      December 31, 2005, a liability of $13.1 million was recorded related to
      purchases of securities from a broker that had been made on margin. There was
      no
      margin liability outstanding at December 31, 2006. The margin liability is
      secured by the securities we purchased and cannot exceed certain pre-established
      percentages of the fair market value of the securities collateralizing the
      liability. If the balance of the margin exceeds certain pre-established
      percentages of the fair market value of the securities collateralizing the
      liability, we will be subject to a margin call and required to fund the account
      to return the margin balance to certain pre-established percentages of the
      fair
      market value of the securities collateralizing the liability.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-37</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>8. Trade, Notes and
      Other Receivables, Net</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Trade,
      notes and other receivables, net consist of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="326">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="435">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="116" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="435">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="435">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="435">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Trade
                receivables &#8211; Home
                Fashion&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">134,111</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">173,050</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="435">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Allowance
                for doubtful accounts &#8211; Home Fashion</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(8,303</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(8,313</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="435">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">50,688</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">30,584</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="435">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">176,496</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">195,321</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>9. Other Current
      Assets</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Other
      current assets consist of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="320">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="427">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="116" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="427">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="427">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="427">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Restricted
                cash&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">87,428</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">161,210</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="427">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">47,559</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">53,650</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="427">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">134,987</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">214,860</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Restricted
      cash is primarily composed of funds required as collateral for the outstanding
      short security position. Additionally, there are restricted cash balances for
      escrow deposits and funds held in connection with collateralizing letters of
      credit. As of December 31, 2006, restricted cash included $50.8 million relating
      to cash placed in escrow relating to our sale of ACE to Pinnacle.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>10. Property, Plant
      and Equipment, Net</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Property,
      plant and equipment consist of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="350">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="39">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="467">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="135" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="467">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="60">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="467">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Land&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">129,729</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">122,586</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Buildings
                and improvements</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">446,878</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">324,917</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Machinery,
                equipment and furniture</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">333,741</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">255,807</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Assets
                leased to others</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">123,398</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">141,997</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Construction
                in progress</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">90,672</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">69,669</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">1,124,418</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">914,976</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                accumulated depreciation and amortization</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(217,347</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(165,264</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">907,071</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">749,712</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Depreciation
      and amortization expense from continuing operations related to property, plant
      and equipment for the years ended December 31, 2006, 2005 and 2004 was $65.3
      million, $46.8 million and $28.8 million, respectively.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-38</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>11. Other Non-Current
      Assets</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Other
      non-current assets consist of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="376">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="27">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="27">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="502">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="104" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="502">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="43">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="502">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="37" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                income taxes</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">48,976</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">51,509</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                finance costs, net of accumulated amortization of $4,827 and $0 as
                of<br>December 31, 2006 and 2005, respectively</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">11,684</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">6,544</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24,577</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27,353</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="502">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">85,237</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">85,406</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>12. Minority
      Interests</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Minority
      interests consist of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="368">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="490">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="116" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="490">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="490">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="490">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">WPI</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">178,843</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">247,015</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="490">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Atlantic
                Coast</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">70,563</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">57,584</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="490">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">NEGI</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">42,815</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="490">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">292,221</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">304,599</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>13. Long-Term
      Debt</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Long-term
      debt consists of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="349">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="466">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="136" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="466">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="60">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="466">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="466">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Senior
                unsecured 7.125% notes due 2013 &#8211;
                AREP&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">475,500</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">474,750</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="466">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Senior
                unsecured 8.125% notes due 2012 &#8211; AREP, net of discount</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">346,027</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">344,726</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="466">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Senior
                secured 7.85% notes due 2012 &#8211; ACEP</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">215,000</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">215,000</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="466">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Borrowings
                under credit facilities &#8211; ACEP</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">40,000</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="466">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Borrowings
                under credit facilities &#8211; NEG Oil &amp; Gas</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">300,000</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="466">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Mortgages
                payable</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">109,289</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">81,512</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="466">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">13,425</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8,387</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="466">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                long-term debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">1,199,241</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">1,424,375</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="466">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less:
                current portion, including debt related to assets held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(23,970</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(324,155</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="466">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,175,271</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,100,220</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Senior unsecured
      notes &#8212; AREP</i></strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Senior unsecured 7.125%
      notes due 2013</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">On
      February 7, 2005, AREP and American Real Estate Finance Corp., or AREF,
      completed their offering of senior notes due 2013. AREF, a wholly-owned
      subsidiary of the Company, was formed solely for the purpose of serving as
      a
      co-issuer of debt securities. AREF does not have any operations or assets and
      does not have any revenues. The notes, in the aggregate principal amount of
      $480.0 million, were priced at 100% of principal amount. The notes have a fixed
      annual interest rate of 7 1/8%, which will be paid every six months on February
      15 and August 15. The notes will mature on February 15, 2013. AREH is a
      guarantor of the debt. No other subsidiaries guarantee payment on the
      notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-39</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>13. Long-Term Debt
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      described below, the notes restrict the ability of AREP and AREH, subject to
      certain exceptions, to, among other things: incur additional debt; pay dividends
      or make distributions; repurchase depository units; create liens; and enter
      into
      transactions with affiliates.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Senior unsecured 8.125%
      notes due 2012</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On May
      12, 2004, AREP and AREF closed on their offering of senior notes due 2012.
      The
      notes, in the aggregate principal amount of $353 million, were priced at 99.266%
      of principal amount. The notes have a fixed annual interest rate of 8 1/8%,
      which will be paid every six months on June 1 and December 1, commencing
      December 1, 2004. The notes will mature on June 1, 2012. AREH is a guarantor
      of
      the debt. No other subsidiaries guarantee payment on the notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      described below, the notes restrict the ability of AREP and AREH, subject to
      certain exceptions, to, among other things; incur additional debt; pay dividends
      or make distributions; repurchase depository units; create liens; and enter
      into
      transactions with affiliates.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Senior unsecured notes
      restrictions and covenants</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Both
      issuances of our senior unsecured notes restrict the payment of cash
      distributions, the purchase of equity interests or the purchase, redemption,
      defeasance or acquisition of debt subordinated to the senior unsecured notes.
      The notes also restrict the incurrence of debt or the issuance of disqualified
      stock, as defined, with certain exceptions, provided that we may incur debt
      or
      issue disqualified stock if, immediately after such incurrence or issuance,
      the
      ratio of the aggregate principal amount of all outstanding indebtedness of
      AREP
      and its subsidiaries on a consolidated basis to the tangible net worth of AREP
      and its subsidiaries on a consolidated basis would have been less than 1.75
      to
      1.0. As of December 31, 2006, such ratio was less than 1.75 to 1.0. Based on
      this ratio, we and AREH could have incurred up to approximately $1.6 billion
      of
      additional indebtedness.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition, both issuances of notes require that on each quarterly determination
      date we and the guarantor of the notes (currently only AREH) maintain a minimum
      ratio of cash flow to fixed charges each as defined, of 1.5 to 1.0, for the
      four
      consecutive fiscal quarters most recently completed prior to such quarterly
      determination date. For the four quarters ended December 31, 2006, the ratio
      of
      cash flow to fixed charges was greater than 1.5 to 1.0.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The notes
      also require, on each quarterly determination date, that the ratio of total
      unencumbered assets, as defined, to the principal amount of unsecured
      indebtedness, as defined, be greater than 1.5 to 1.0 as of the last day of
      the
      most recently completed fiscal quarter. As of December 31, 2006, such ratio
      was
      in excess of 1.5 to 1.0.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The notes
      also restrict the creation of liens, mergers, consolidations and sales of
      substantially all of our assets, and transactions with affiliates.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December 31, 2006, we were in compliance with each of the covenants contained
      in
      our senior unsecured notes. We expect to be in compliance with each of the
      debt
      covenants for the period of at least twelve months from December 31, 2006.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>AREP Senior Secured
      Revolving Credit Facility</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On August
      21, 2006, we and AREP Finance as the Borrowers, and certain of our subsidiaries,
      as Guarantors, entered into a credit agreement with Bear Stearns Corporate
      Lending Inc., as Administrative Agent, and certain other lender parties. Under
      the credit agreement, we are permitted to borrow up to $150.0 million, including
      a $50.0 million sub-limit that may be used for letters of credit. Borrowings
      under the agreement, which are based on our credit rating, bear interest at
      LIBOR plus 1.0% to 2.0%. We pay an unused line fee of 0.25% to 0.5%. As of
      December 31, 2006, there were no borrowings under the facility.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-40</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>13. Long-Term Debt
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Obligations
      under the credit agreement are guaranteed by and secured by liens on
      substantially all of the assets of certain of our indirect wholly-owned holding
      company subsidiaries. The credit agreement has a term of four years and all
      amounts will be due and payable on August 21, 2010. The credit agreement
      includes covenants that, among other things, restrict the creation of liens
      and
      certain dispositions of property by our wholly-owned holding company
      subsidiaries that are guarantors. Obligations under the credit agreement are
      immediately due and payable upon the occurrence of certain events of
      default.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Senior secured
      7.85% notes due 2012 &#8212; ACEP</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      January 2004, ACEP issued senior secured notes due 2012. The notes, in the
      aggregate principal amount of $215.0 million, bear interest at the rate of
      7.85%
      per annum, which will be paid every six months, on February 1 and August
      1.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">ACEP&#8217;s
      7.85% senior secured notes due 2012 restrict the payment of cash dividends
      or
      distributions by ACEP, the purchase of its equity interests, the purchase,
      redemption, defeasance or acquisition of debt subordinated to ACEP&#8217;s notes and
      investments as &#8220;restricted payments.&#8221; ACEP&#8217;s notes also prohibit the incurrence
      of debt or the issuance of disqualified or preferred stock, as defined, by
      ACEP,
      with certain exceptions, provided that ACEP may incur debt or issue disqualified
      stock if, immediately after such incurrence or issuance, the ratio of
      consolidated cash flow to fixed charges (each as defined) for the most recently
      ended four full fiscal quarters for which internal financial statements are
      available immediately preceding the date on which such additional indebtedness
      is incurred or disqualified stock or preferred stock is issued would have been
      at least 2.0 to 1.0, determined on a pro forma basis giving effect to the debt
      incurrence or issuance. As of December 31, 2006, such ratio was in excess of
      2.0
      to 1.0. The ACEP notes also restrict the creation of liens, the sale of assets,
      mergers, consolidations or sales of substantially all of its assets, the lease
      or grant of a license, concession, other agreements to occupy, manage or use
      ACEP&#8217;s assets, the issuance of capital stock of restricted subsidiaries and
      certain related party transactions. The ACEP notes allow it to incur
      indebtedness, among other things, of up to $50.0 million under credit
      facilities, non-recourse financing of up to $15.0 million to finance the
      construction, purchase or lease of personal or real property used in its
      business, permitted affiliate subordinated indebtedness (as defined), the
      issuance of additional 7.85% senior secured notes due 2012 in an aggregate
      principal amount not to exceed 2.0 times net cash proceeds received from equity
      offerings and permitted affiliate subordinated debt, and additional indebtedness
      of up to $10.0 million.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>ACEP Senior Secured
      Revolving Credit Facility</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Effective
      May 11, 2006, ACEP, and certain of ACEP&#8217;s subsidiaries, as Guarantors, entered
      into an amended and restated credit agreement with Wells Fargo Bank N.A., as
      syndication agent, Bear Stearns Corporate Lending Inc., as administrative agent,
      and certain other lender parties. As of December 31, 2006, the interest rate
      on
      the outstanding borrowings under the credit facility was 6.85% per annum. The
      credit agreement amends and restates, and is on substantially the same terms
      as,
      a credit agreement entered into as of January 29, 2004. Under the credit
      agreement, ACEP will be permitted to borrow up to $60.0 million. Obligations
      under the credit agreement are secured by liens on substantially all of the
      assets of ACEP and its subsidiaries. The credit agreement has a term of four
      years and all amounts will be due and payable on May 10, 2010. As of December
      31, 2006, there were $40.0 million of borrowings under the credit agreement.
      The
      borrowings were incurred to finance a portion of the purchase price of the
      Aquarius.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      credit agreement includes covenants that, among other things, restrict the
      incurrence of additional indebtedness by ACEP and its subsidiaries, the issuance
      of disqualified or preferred stock, as defined, the creation of liens by ACEP
      or
      its subsidiaries, the sale of assets, mergers, consolidations or sales of
      substantially all of ACEP&#8217;s assets, the lease or grant of a license or
      concession, other agreements to occupy, manage or use ACEP&#8217;s assets, the
      issuance of capital stock of restricted subsidiaries and certain related party
      transactions. The credit agreement also requires that, as of the last date
      of
      each fiscal quarter, ACEP&#8217;s ratio of consolidated first lien debt to
      consolidated cash flow not be more than 1.0 to 1.0. As of December 31, 2006,
      such ratio was less than 1.0 to 1.0. As of December 31, 2006, ACEP was in
      compliance with each of the covenants.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-41</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>13. Long-Term Debt
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      restrictions imposed by ACEP&#8217;s senior secured notes and the credit facility
      likely will limit our receiving payments from the operations of our hotel and
      gaming properties.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>NEG Oil &amp; Gas
      LLC Senior Secured Revolving Credit Facility</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      December 22, 2005, NEG Oil &amp; Gas entered into a credit facility, dated as of
      December 20, 2005, with Citicorp USA, Inc. as administrative agent, Bear Stearns
      Corporate Lending Inc., as syndication agent, and certain other lender
      parties.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Under
      the
      credit facility, NEG Oil &amp; Gas was permitted to borrow up to $500.0 million.
      Borrowings under the revolving credit facility was subject to a borrowing base
      determination based on the oil and gas properties of NEG Oil &amp; Gas and its
      subsidiaries and the reserves and production related to those properties.
      Obligations under the credit facility were secured by liens on all of the assets
      of NEG Oil &amp; Gas and its wholly-owned subsidiaries. The credit facility had
      a term of five years and all amounts were due and payable on December 20, 2010.
      Advances under the credit facility will be in the form of either base rate
      loans
      or Eurodollar loans, each as defined. At December 31, 2005, the interest rate
      on
      the outstanding amount under the credit facility was 6.44%. Commitment fees
      for
      the unused credit facility range from 0.375% to 0.50% and are payable
      quarterly.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">NEG Oil
      &amp; Gas used the proceeds of the initial $300.0 million borrowings to (1)
      purchase the existing obligations of its indirect subsidiary, NEG Operating,
      from the lenders under NEG Operating&#8217;s credit facility with Mizuho Corporate
      Bank, Ltd., as administrative agent; (2) repay a National Onshore loan borrowed
      from AREP of approximately $85.0 million used to purchase properties in the
      Minden Field; (3) pay a distribution to AREP of $78.0 million; and (4) pay
      transaction costs.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      discussed above, on November 21, 2006, our indirect wholly-owned subsidiary,
      AREP O &amp; G Holdings LLC, consummated the sale of all of the issued and
      outstanding membership interests of NEG Oil &amp; Gas LLC to SandRidge Energy,
      Inc. for consideration consisting of $1.025 billion in cash, 12,842,000 shares
      of SandRidge&#8217;s common stock, valued at $18 per share on the date closing, and
      the repayment by SandRidge of the outstanding borrowings under the NEG Oil
&amp;
Gas $300.0 million credit facility.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Mortgages
      Payable</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Mortgages
      payable, all of which are nonrecourse to us, are summarized below. The mortgages
      bear interest at rates between 4.97 and 7.99% and have maturities between
      September 1, 2008 and July 1, 2016. The following is a summary of mortgages
      payable (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="332">
            </td>
            <td width="16">
            </td>
            <td width="6">
            </td>
            <td width="43">
            </td>
            <td width="16">
            </td>
            <td width="6">
            </td>
            <td width="41">
            </td>
            <td width="4">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="443">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td colspan="5" valign="bottom" width="152" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="443">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td colspan="2" valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="443">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="443">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                mortgages&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">109,289</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">81,512</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="443">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                current portion and mortgages on properties held for sale</div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(18,174</div>
            </td>
            <td valign="bottom" width="22" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(18,104</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="443">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">91,115</div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">63,408</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On June
      30, 2006, certain of our indirect subsidiaries engaged in property development
      and associated resort activities entered into a $32.5 million loan agreement
      with Textron Financial Corp. The loan is secured by a mortgage on our New
      Seabury golf course and resort in Mashpee, Massachusetts. The loan bears
      interest at the rate of 7.96% per annum and matures in five years with a balloon
      payment due of $30.0 million. Annual debt service payments of $3.0 million
      are
      required, which are payable in monthly installment amounts based on a 25-year
      amortization schedule.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-42</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>13. Long-Term Debt
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>WestPoint Home
      Secured Revolving Credit Agreement</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On June
      16, 2006, WestPoint Home, Inc., an indirect wholly-owned subsidiary of WPI,
      entered into a $250.0 million loan and security agreement with Bank of America,
      N.A., as Administrative Agent and lender. On September 18, 2006, The CIT
      Group/Commercial Services, Inc., General Electric Capital Corporation and Wells
      Fargo Foothill, LLC were added as lenders under this credit agreement. Under
      the
      five-year agreement, borrowings are subject to a monthly borrowing base
      calculation and include a $75.0 million sub-limit that may be used for letters
      of credit. Borrowings under the agreement bear interest, at the election of
      WestPoint Home, either at the prime rate adjusted by an applicable margin
      ranging from minus 0.25% to plus 0.50% or LIBOR adjusted by an applicable margin
      ranging from plus 1.25% to 2.00%. WestPoint Home pays an unused line fee of
      0.25% to 0.275%. Obligations under the agreement are secured by WestPoint Home&#8217;s
      receivables, inventory and certain machinery and equipment.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      agreement contains covenants including, among others, restrictions on the
      incurrence of indebtedness, investments, redemption payments, distributions,
      acquisition of stock, securities or assets of any other entity and capital
      expenditures. However, WestPoint Home is not precluded from effecting any of
      these transactions if excess availability, after giving effect to such
      transaction, meets a minimum threshold.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December 31, 2006, there were no borrowings under the agreement, but there
      were
      outstanding letters of credit of approximately $40.1 million, the majority
      of
      which relate to trade obligations.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Maturities</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      following is a summary of the maturities of our debt obligations (in
      $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="370">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2007&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">23,970</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2008</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">29,227</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2009</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">6,670</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2010</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">1,684</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2011</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">31,446</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2012
                &#8211; 2017</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,115,963</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,208,960</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>14. Other Income
      (Expense), Net</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Other
      Income (Expense), net, is comprised of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="308">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="411">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="8" valign="bottom" width="190" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="411">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="411">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                realized gains on sales of marketable
                securities&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">69,099</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">10,120</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">40,159</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Unrealized
                gains (losses) on marketable securities</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">21,288</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">9,856</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(4,812</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                realized losses on securities sold short</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(17,146</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(37,058</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Unrealized
                gains (losses) on securities sold short</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">18,067</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(4,178</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(18,807</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gain
                on sale assets</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">3,372</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">201</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">5,262</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,597</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8,198</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,651</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="411">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">99,277</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(12,861</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">24,453</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 5.35pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-43</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 6.65pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div>&#160;</div>
    <div style="MARGIN: 0pt" align="center"><strong>AMERICAN REAL ESTATE HOLDINGS
      LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>15. Segment
      Reporting</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Through
      the second quarter of 2006, we maintained the following six reportable segments:
      (1) Oil and Gas; (2) Gaming; (3) Rental Real Estate; (4) Property Development;
      (5) Associated Resort Activities; and (6) Home Fashion. Our three real estate
      related operating and reportable segments are all individually immaterial and
      have been aggregated for purposes of the accompanying consolidated balance
      sheets and statements of operations. WPI markets a broad range of manufactured
      and sourced bed, bath and basic bedding products, including sheets, pillowcases,
      bedspreads, quilts, comforters and duvet covers, bath towels, bath rugs, beach
      towels, shower curtains, bath accessories, bedskirts, bed pillows, flocked
      blankets, woven blankets and throws, and heated blankets and mattress
      pads.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      described above, on November 21, 2006, we sold all of our Oil and Gas operations
      to SandRidge Energy, Inc. As a result, our Oil and Gas operations are now
      classified as discontinued operations and thus are not considered a reportable
      segment of our continuing operations. We now maintain the five remaining
      reportable segments.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We assess
      and measure segment operating results based on segment earnings from operations
      as disclosed below. Segment earnings from operations are not necessarily
      indicative of cash available to fund cash requirements nor synonymous with
      cash
      flow from operations. As discussed above, the terms of financings for the
      Gaming, Home Fashion and Resorts segments impose restrictions on their ability
      to transfer funds to us, including restrictions on dividends, distributions,
      loans and other transactions.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our
      operating businesses are organized based on the nature of products and services
      provided. The accounting policies of the segments are the same as those
      described in Note 2.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-44</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>15. Segment Reporting
      &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      revenues, net segment operating income, assets and capital expenditures for
      each
      of the reportable segments are summarized as follows for the years ended
      December 31, 2006, 2005 and 2004 (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="294">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="46">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="392">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="210" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="392">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="68" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="392">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">385,699</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">327,982</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">299,981</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                development</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">90,955</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">58,270</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">27,073</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                real estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">14,913</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">14,382</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">16,566</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">28,707</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27,647</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">17,918</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                real estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">134,575</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">100,299</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">61,557</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">957,656</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">472,681</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                revenues</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="61" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,477,930</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">900,962</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">361,538</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                segment operating income:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">58,715</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">67,027</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">48,862</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                development</div>
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            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">17,914</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">9,591</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">4,124</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
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          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                real estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">9,898</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">9,794</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">8,395</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">142</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,598</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(643</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                real estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">27,954</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">17,787</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">11,876</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(150,637</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(22,429</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                segment earnings (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">(63,968</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">62,385</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">60,738</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Holding
                Company costs(i)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(25,822</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(17,142</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(4,741</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                operating income (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">(89,790</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">45,243</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">55,997</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">(100,514</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(85,418</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(42,209</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">52,656</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">42,791</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">42,145</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                income (expense)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">99,277</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(12,861</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">24,453</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                on earnings of affiliate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">12,620</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,375</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                tax expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">(13,271</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(18,170</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(10,099</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                Interest</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">68,173</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">10,140</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="392">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) from continuing operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="61" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">29,151</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(16,900</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">70,287</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 13pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 17.3pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -17.3pt; LINE-HEIGHT: 13pt">(i)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 17.3pt; MARGIN-BOTTOM: 2.5pt; LINE-HEIGHT: 11pt">Holding
      Company costs include general and administrative expenses and acquisition (legal
      and professional) costs at the holding company level. Certain real estate
      expenses are included in the Holding Company to the extent they relate to
      administration of our various real estate holdings. Selling, general and
      administrative expenses of the segments are included in their respective
      operating expenses in the accompanying consolidated statements of
      operations.</div>
    <div style="MARGIN: 0pt"><br></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="352">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="469">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="137" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="469">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="60">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="469">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="469">
              <div style="MARGIN-TOP: 0.85pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="469">
              <div style="MARGIN-TOP: 0.85pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Gaming&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">552,753</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">469,776</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="469">
              <div style="MARGIN-TOP: 0.85pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Real
                estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">382,220</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">415,361</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="469">
              <div style="MARGIN-TOP: 0.85pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">806,000</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">750,281</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="469">
              <div style="MARGIN-TOP: 0.85pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Subtotal</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">1,740,973</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">1,635,418</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="469">
              <div style="MARGIN-TOP: 0.85pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Assets
                held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">47,503</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">1,177,398</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="469">
              <div style="MARGIN-TOP: 0.85pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Reconciling
                items(ii)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">2,463,167</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">1,155,403</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="469">
              <div style="MARGIN-TOP: 0.85pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">4,251,643</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 0.85pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt" align="right">3,968,219</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-45</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>AMERICAN REAL ESTATE HOLDINGS
      LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>15. Segment
      Reporting &#8211; (continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="319">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="29">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="29">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="36">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="425">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="181" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="425">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="425">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization (D&amp;A):</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">27,620</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">22,305</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">23,516</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                estate:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                real estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">2,010</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">1,944</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">2,281</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                Development</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">374</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,666</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,158</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,989</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                real estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">6,050</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">5,102</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">5,270</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">31,584</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">19,406</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">D&amp;A
                in operating expenses</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">65,254</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">46,813</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">28,786</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                in interest expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5,691</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,375</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">189</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="425">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">70,945</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">48,188</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">28,975</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
                expenditures:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">46,852</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">28,219</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">14,009</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                real estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">1,262</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">187</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">11,783</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                Development</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">67,843</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">2,115</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">2,256</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">15,897</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="425">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">11,109</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5,718</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="425">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">61,338</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">36,380</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">109,532</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 13pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 17.1pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -17.1pt">(ii)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 17.1pt; MARGIN-BOTTOM: 2.5pt">Reconciling
      items relate principally to cash and investments of the Holding Company.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>16. Income
      Taxes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      difference between the book basis and the tax basis of our net assets, not
      directly subject to income taxes, is as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="344">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="41">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="41">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="459">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="142" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="459">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="62">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="459">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Book
                basis of AREH net assets excluding corporate
                entities&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">1,954,251</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">2,156,608</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Book/tax
                basis difference</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(15,084</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(559,043</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Tax
                basis of net assets</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,939,167</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,597,565</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Our
      corporate subsidiaries recorded the following income tax (expense) benefit
      attributable to our taxable subsidiaries (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="312">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="31">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="416">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="186" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="416">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="47">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="47">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="416">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Continuing
                Operations:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(13,269</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(8,323</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(2,670</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(2</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(9,847</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(7,429</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(13,271</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(18,170</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(10,099</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Discontinued
                Operations:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(28,589</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(2,639</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(1,346</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,711</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(283</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6,867</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(26,878</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(2,922</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(8,213</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 5.35pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-46</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 6.65pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>AMERICAN REAL ESTATE HOLDINGS
      LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>16. Income Taxes
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In 2006,
      the income tax expense attributable to income from discontinued operations
      was
      $4.2 million and the income tax expense attributable to the gain on sale of
      assets was $22.6 million.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      tax effect of significant differences representing net deferred tax assets
      (the
      difference between financial statement carrying values and the tax basis of
      assets and liabilities) is as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="355">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="474">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="5" valign="bottom" width="126" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="474">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="54">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="474">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                tax assets:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and
                equipment&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">63,308</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">26,219</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                operating loss</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">70,504</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">54,583</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">17,507</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">21,802</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="474">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">151,319</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">102,604</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Valuation
                allowance</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(95,754</div>
            </td>
            <td valign="bottom" width="18" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(48,788</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                deferred tax assets</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">55,565</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">53,816</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less:
                Current portion</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6,589</div>
            </td>
            <td valign="bottom" width="18" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(2,307</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="474">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                tax asset &#8211; Non-current</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">48,976</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">51,509</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      reconciliation of the effective tax rate on continuing operations as shown
      in
      the consolidated statement of operations to the federal statutory rate is as
      follows:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="306">
            </td>
            <td width="14">
            </td>
            <td width="30">
            </td>
            <td width="24">
            </td>
            <td width="30">
            </td>
            <td width="24">
            </td>
            <td width="24">
            </td>
            <td width="9">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="409">&#160;</td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="top" width="33">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="33">&#160;</td>
            <td valign="top" width="33" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="409">&#160;</td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="top" width="33">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="33">&#160;</td>
            <td valign="top" width="33">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Federal
                statutory
                rate&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">35.0</div>
            </td>
            <td valign="top" width="33">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">35.0</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="33">
              <div style="MARGIN: 0pt" align="right">35.0</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Valuation
                allowance</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(104.1</div>
            </td>
            <td valign="top" width="33">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(110.9</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="top" width="33">
              <div style="MARGIN: 0pt" align="right">(2.3</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                not subject to taxation</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">15.4</div>
            </td>
            <td valign="top" width="33">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(137.6</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="top" width="33">
              <div style="MARGIN: 0pt" align="right">(22.0</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.1</div>
            </td>
            <td valign="top" width="33">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8.6</div>
            </td>
            <td valign="bottom" width="33">&#160;</td>
            <td valign="top" width="33" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.9</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">&#160;</td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(51.6</div>
            </td>
            <td valign="top" width="33">
              <div style="MARGIN: 0pt">)%</div>
            </td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(204.9</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt">)%</div>
            </td>
            <td valign="top" width="33" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">12.6</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      year ended December 31, 2006, the valuation allowance on deferred tax assets
      increased approximately $47.0 million. The increase is primarily attributable
      to
      an $81.5 million increase attributable to the additional valuation allowance
      established on the deferred tax assets of WPI, offset by a $25.7 million
      reversal of the valuation allowance at Atlantic Coast, and an $8.8 million
      reversal of the valuation allowance at NEG.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Gaming
      Segment</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">SFAS
      No.
      109 requires that a &#8220;more likely than not&#8221; criterion be applied when evaluating
      the realizability of a deferred tax asset. As of December 31, 2005, given
      Atlantic Coast&#8217;s history of losses for income tax purposes and certain other
      factors, Atlantic Coast had established a valuation allowance of $27.7 million
      on its deferred tax assets. However, at December 31, 2006, based on various
      factors including the sale of its gaming operations and the future taxable
      income projections from the reinvestment of the sales proceeds, Atlantic Coast
      determined that it was more likely than not that a significant portion of
&#160;the deferred tax assets will be realized and removed $25.7 million of the
      valuation allowance.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">At
      December 31, 2006, Atlantic Coast had federal net operating loss carryforwards
      totaling approximately $41.7 million, which will expire in the years 2023
      through 2025. We also had New Jersey net operating loss carryforwards totaling
      approximately $0.6 million as of December 31, 2006, which will begin expiring
      in
      the year 2012. Additionally, Atlantic Coast had general business credit
      carryforwards of approximately $1.4 million which expire in 2009 through 2026,
      and New Jersey alternative minimum assessment (AMA) credit carryforwards of
      approximately $1.9 million, which can be carried forward indefinitely.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-47</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>16. Income Taxes
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Oil and Gas
      Operations</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">As
      of December 31, 2005, NEGI had established a valuation allowance of
      approximately $8.8 million due to the uncertainty that it would generate enough
      future taxable income in order to utilize all of its deferred tax assets. During
      the year ended December 31, 2006, NEGI generated enough taxable income,
      primarily from the gain on its sale of its interest in NEG Holdings, to utilize
      all of its net operating loss carryforwards, and as of December 31, 2006 has
      no
      remaining deferred tax assets. Accordingly, during the year ended December
      31,
      2006, the valuation allowance of $8.8 million was also reversed.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>17. Commitments and
      Contingencies</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      are from time to time parties to various legal proceedings arising out of our
      businesses. We believe however, that other than the proceedings discussed below,
      there are no proceedings pending or threatened against us which, if determined
      adversely, would have a material adverse effect on our business, financial
      condition, results of operations or liquidity.</div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 0pt"><strong><i>Lear
      Corporation</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      have been named as a defendant in various actions recently filed in connection
      with our agreement and plan of merger to acquire Lear Corporation (See Note
      20).
      The following actions have been filed in the Court of Chancery of State of
      Delaware, New Castle County; <i>Market Street Securities, Inc. v. Rossiter, et
      al; Harry Massie, Jr. v. Lear Corporation, et al; and Emilio Valentine v. Lear
      Corporation, et al.</i> Some of the actions also name certain of our affiliates,
      AREP Car Holdings, Corp. and AREP Car Acquisition Corp., and one of our
      directors as defendants. The above referenced actions generally allege that
      members of Lear&#8217;s board of directors breached their fiduciary duties to Lear and
      that we, and in some cases our named affiliates, aided and abetted the Lear
      directors. All of these cases were filed in February 2007 and thus are in the
      very preliminary stages. We intend to vigorously defend against these
      claims.</div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 0pt"><strong><i>WPI
      Litigation</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">In
      November and December 2005, the U.S. District Court for the Southern District
      of
      New York rendered a decision in <i>Contrarian Funds Inc. v. WestPoint Stevens,
      Inc. et al.</i>, and issued orders reversing certain provisions of the
      Bankruptcy Court order, or the Sale Order, pursuant to which we acquired our
      ownership of a majority of the common stock of WPI. WPI acquired substantially
      all of the assets of WestPoint Stevens, Inc. On April 13, 2006, the Bankruptcy
      Court entered a remand order, or the Remand Order, which provides, among other
      things, that all of the shares of common stock and rights to acquire shares
      of
      common stock of WPI issued to us and the other first lien lenders or held in
      escrow pursuant to the Sale Order constituted &#8220;replacement collateral&#8221;, other
      than 5,250,000 shares of common stock that we acquired for cash. The 5,250,000
      shares represent approximately 27% of the 19,498,389 shares of common stock
      of
      WPI now outstanding. According to the Remand Order, we would share <i>pro
      rata</i> with the other first lien lenders in proceeds realized from the
      disposition of the replacement collateral and, to the extent there is remaining
      replacement collateral after satisfying first lien lender claims, we would
      share
<i>pro rata</i> with the other second lien lenders in any further proceeds. We
      were holders of approximately 39.99% of the outstanding first lien debt and
      approximately 51.21% of the outstanding second lien debt. On April 13, 2006,
      the
      Bankruptcy Court also entered an order staying the Remand Order pending appeal.
      The parties filed cross-appeals of the Remand Order and Contrarian Funds and
      certain other first lien lenders, or the Contrarian Group, filed a motion to
      lift the stay of the Remand Order pending appeal. Oral argument was held in
      the
      District Court on October 19, 2006. As of the date hereof, no decision has
      been
      issued.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">On
      December 11, 2006, the Contrarian Group filed a motion in the District Court
      seeking a temporary restraining order, or the NY TRO, restraining WPI from
      proceeding with a stockholders&#8217; meeting scheduled for December 20, 2006, which
      was to consider corporate actions relating to a proposed offering of $200
      million of preferred stock of WPI, and for related relief. The District Court
      held a hearing on December 15, 2006, at which it entered an order denying the
      Contrarian Group&#8217;s application for the NY TRO.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-48</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>17. Commitments and
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      December 18, 2006, the Contrarian Group filed an action in the Court of Chancery
      of the State of Delaware, New Castle County, <i>Contrarian Funds, LLC, et al v.
      WestPoint International Inc., et al.</i>, seeking, among other things, a
      temporary order restraining the stockholders&#8217; meeting and the preferred stock
      offering. The application was denied by order dated December 19, 2006. The
      stockholders&#8217; meeting took place on December 20, 2006, the preferred stock
      offering was approved, and other corporate actions were taken. We purchased
      all
      of the $200.0 million of preferred stock.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      January 19, 2007, Beal Bank and the Contrarian Group filed an Amended Complaint,
      captioned <i>Beal Bank, S.S.B. et al v. WestPoint International, Inc.</i>, et
      al. Plaintiffs seek, among other relief, an order declaring that WPI is obliged
      to register the common stock (other than the 5,250,000 shares purchased by
      us)
      in Beal Bank&#8217;s name, an order declaring certain corporate governance changes
      implemented in 2005 invalid, an order declaring invalid the actions taken at
      the
      December 20, 2006 stockholders&#8217; meeting and an order to &#8220;unwind&#8221; the issuance of
      the preferred stock, or, alternatively, directing that such preferred stock
      be
      held in trust. The Delaware action remains pending and we intend to vigorously
      defend against such claims.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      currently own approximately 67.7% of the outstanding shares of common stock
      and
      100% of the preferred stock of WPI. As a result of the District Court&#8217;s order in
      the Bankruptcy case, the proceedings on remand, and the proceedings in the
      Delaware action, our percentage of the outstanding shares of common stock of
      WPI
      could be reduced to less than 50% and perhaps substantially less and our
      ownership of the preferred stock of WPI could also be affected. If we were
      to
      lose control of WPI, it could adversely affect the business and prospects of
      WPI
      and the value of our investment in it. In addition, we consolidated the balance
      sheet of WPI as of December 31, 2006 and WPI&#8217;s results of operations for the
      period from the date of acquisition through December 31, 2006. If we were to
      own
      less than 50% of the outstanding common stock or the challenge to our preferred
      stock ownership is successful, we would have to evaluate whether we should
      consolidate WPI and if so our financial statements could be materially different
      than as presented as of December 31, 2006 and December 31, 2005 and for the
      periods then ended.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We cannot
      predict the outcome of these proceedings or the ultimate impact on our
      investment in WPI or the business prospects of WPI.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>GBH</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      September 29, 2005, GBH filed a voluntary petition for bankruptcy relief under
      Chapter 11 of the Bankruptcy Code. As a result of this filing, we determined
      that we no longer control GBH for accounting purposes, and deconsolidated our
      investment in GBH effective September 30, 2005.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">An
      Official Committee of Unsecured Creditors, or the Committee, of GBH, was formed
      and, on October 13, 2006, was granted standing by the Bankruptcy Court to
      commence litigation in the name of GBH against us, ACE, Atlantic Coast and
      other
      entities affiliated with Carl C. Icahn, as well as the directors of GBH. The
      Committee challenged the transaction in July 2004 that, among other things,
      resulted in the transfer of The Sands to ACE, a wholly owned subsidiary of
      Atlantic Coast, the exchange by certain holders of GBH&#8217;s 11% notes for Atlantic
      Coast 3% senior secured convertible notes due 2008, or the 3% notes, the
      issuance to the holders of GBH&#8217;s common stock of warrants allowing the holders
      to purchase shares of Atlantic Coast common stock and, ultimately, our ownership
      of approximately 67.6% of the outstanding shares of Atlantic Coast common stock
      and ownership by GBH ^ of approximately 30.7% of such stock. We also maintained
      ownership of approximately 77.5% of the outstanding shares of GBH common stock.
      The Committee originally filed an objection to the allowance of our claims
      against GBH. The Bankruptcy Court placed the consideration of the Committee&#8217;s
      Proposed Plan of Liquidation and Disclosure Statement in abeyance until the
      resolution of the proposed litigation.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-49</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>17. Commitments and
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Additionally,
      on September 2, 2005, Robino Stortini Holdings, LLC, or RSH, which claimed
      to
      own beneficially 1,652,590 shares of common stock of GBH, filed a complaint
      in
      the Court of Chancery of the State of Delaware against GBH and its Board of
      Directors seeking appointment of a custodian and receiver for GBH and a
      declaration that the director defendants breached their fiduciary duties.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">During
      the fourth quarter of 2006, we and other entities affiliated with Mr.&#160;Icahn
      entered into a term sheet with the Committee, GBH and RSH which outlined the
      resolution of claims relating to the July 2004 transactions. The provisions
      of
      the term sheet were incorporated in the Committee&#8217;s Eighth Modified Chapter 11
      Plan of Liquidation of GBH. On January 30, 2007, the Bankruptcy Court approved
      the plan. On February 22, 2007, in accordance with the plan, we acquired (1)
      all
      of the Atlantic Coast common stock owned by GBH for a cash payment of
      approximately $52.0 million and in satisfaction of all claims arising under
      the
      Loan and Security Agreement, dated as of July 25, 2005, between GBH and us
      and
      (2) all of the warrants to acquire Atlantic Coast common stock and the Atlantic
      Coast common stock owned by RSH for a cash payment of $3.7 million. As a result,
      Atlantic coast is our indirect wholly-owned subsidiary. In accordance with
      the
      Plan, GBH used the $52.0 million to pay amounts owed to its creditors, including
      the holders of GBH&#8217;s 11% notes and holders of administrative claims and to
      establish an approximate $330,000 fund to be distributed pro rata to holders
      of
      equity interests in GBH other than us and other Icahn affiliated entities.
      In
      addition, we and other Icahn affiliated entities received releases of all direct
      and derivative claims that could be asserted by GBH, its creditors and
      stockholders, including RSH. All issues relating to GBH have now been resolved.
      See Note 20, Subsequent Events.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Leases</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt">Future minimum lease
      payments under operating leases and capital leases with initial or remaining
      terms of one or more years consist of the following at December 31, 2006 (in
      $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="377">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="502">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Operating<br>Leases</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Capital<br>Leases</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="502">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="33">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2007</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">18,872</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">660</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2008</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">16,121</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">660</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2009</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">13,102</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">963</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2010</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">9,921</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">85</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2011</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">6,928</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">85</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Thereafter</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">31,974</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="33" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">7,233</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                minimum lease payments</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">96,918</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="33" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9,686</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                imputed interest costs</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="33" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,860</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="502">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Present
                value of net minimum capital lease
                payments&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,826</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Other</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In the
      ordinary course of business, we, our subsidiaries and other companies in which
      we invest are parties to various legal actions. In management&#8217;s opinion, the
      ultimate outcome of such legal actions will not have a material effect on our
      consolidated financial statements taken as a whole.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>18. Employee Benefit
      Plans</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Employees
      of our subsidiaries who are members of various unions are covered by
      union-sponsored, collectively bargained, multi-employer health and welfare
      and
      defined benefit pension plans. Our subsidiaries recorded expenses for such
      plans
      of $14.0 million, $14.7 million and $13.3 million for the years ended December
      31, 2006, 2005 and 2004, respectively.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-50</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>18. Employee Benefit
      Plans &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We and
      certain of our subsidiaries have retirement savings plans under Section 401(k)
      of the Internal Revenue Code covering our non-union employees. The plans allow
      employees to defer, within prescribed limits, a portion of their income on
      a
      pre-tax basis through contributions to the plans. We currently match the
      deferrals based upon certain criteria, including levels of participation by
      our
      employees. We recorded charges for matching contributions of $1,197,000,
      $824,000 and $840,000 for the years ended December 31, 2006, 2005 and 2004,
      respectively.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>19. Fair Value of
      Financial Instruments</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      estimated fair values of our financial instruments as of December 31, 2006
      and
      2005 are as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="223">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="297">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="146" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Carrying
                Value</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="146" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Fair
                Value</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="297">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="64">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="64">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="64">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="297">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="297">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investments&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">716,797</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">818,567</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">674,613</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">834,413</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="297">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">1,175,271</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">1,100,220</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">1,180,083</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">1,125,377</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      determining fair value of financial instruments, we used quoted market prices
      when available. For instruments where quoted market prices were not available,
      we estimated the present values utilizing current risk adjusted market rates
      of
      similar instruments. The carrying values of cash and cash equivalents, accounts
      receivable and payable, other accruals, securities sold under agreements to
      repurchase and other liabilities are deemed to be reasonable estimates of their
      fair values because of their short-term nature.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Considerable
      judgment is necessarily required in interpreting market data used to develop
      the
      estimates of fair value. Accordingly, the estimates presented herein are not
      necessarily indicative of the amounts that could be realized in a current market
      exchange. The use of different market assumptions and/or estimation
      methodologies may have a material effect on the estimated fair value.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>20. Subsequent
      Events</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Debt
      Offering</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      January 16, 2007, we issued $500.0 million principal amount of 7 1/8% senior
      notes due 2013. The notes were issued pursuant to an indenture dated February
      7,
      2005, between us, as issuer, AREP Finance as co-issuer, AREH, as Guarantor,
      and
      Wilmington Trust Company, as trustee. The notes were issued by us at 99.5%
      of
      par or a 0.5% discount and the amount paid to us included accrued interest
      from
      August 15, 2006 through the issue date. The notes have a fixed annual interest
      rate of 7 1/8% per annum, which will be paid every six months on February 15
      and
      August 15 commencing on February 15, 2007. The notes will mature on February
      15,
      2013.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Potential
      Acquisition of Lear Corporation</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      February 9, 2007, we entered into an agreement and plan of merger pursuant
      to
      which we would acquire Lear Corporation for aggregate consideration of
      approximately $5.2 billion, including the assumption of debt. Lear is a publicly
      traded company that provides automotive interior systems worldwide. Our
      agreement with Lear permits Lear to solicit proposals from other potential
      purchasers for 45 days after the signing of the agreement, until March 26,
      2007,
      after which Lear may continue discussions with any party that has made a bona
      fide acquisition proposal and respond to unsolicited acquisition proposals
      until
      Lear&#8217;s stockholders approve the transaction with us. Mr.&#160;Icahn beneficially
      owns approximately 15.8% of Lear&#8217;s outstanding common stock.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Consummation
      of the Merger is subject to various conditions, including receipt of the
      affirmative vote of the holders of a majority of the outstanding shares of
      Lear,
      antitrust approvals, and other customary closing conditions. Mr.&#160;Icahn
      beneficially owns approximately 15% of Lear&#8217;s outstanding common stock.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-51</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS<br>December 31, 2006, 2005 and
      2004</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>20. Subsequent Events
      &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      February 8, 2007, our subsidiary, AREP Car Holdings Corp. entered into a
      commitment letter with Bank of America, N.A. and Banc of America Securities
      LLC,
      pursuant to which Bank of America will act as the initial lender under two
      senior secured credit facilities in an aggregate amount of $3.6 billion,
      consisting of a $1.0 billion senior secured revolving facility and a $2.6
      billion senior secured term loan B facility. The credit facilities, along with
      cash on hand, are intended to refinance and replace Lear&#8217;s existing credit
      facilities and to fund the transactions contemplated by the merger.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Settlement of
      GBH
      Bankruptcy Proceedings</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      January 30, 2007, the Eighth Modified Chapter 11 Plan of Liquidation of GBH
      was
      approved. On February 22, 2007, in accordance with the plan, we acquired (1)
      all
      of the Atlantic Coast common stock owned by GBH for a cash payment of
      approximately $52.0 million and in satisfaction of all claims arising under
      the
      Loan and Security Agreement, dated as of July 25, 2005, between GBH and us
      and
      (2) all of the warrants to acquire Atlantic Coast common stock and the Atlantic
      Coast common stock owned by RSH for a cash payment of $3.7 million. As a result,
      Atlantic Coast is our indirect wholly-owned subsidiary. In accordance with
      the
      plan, GBH used the $52.0 million to pay amounts owed to its creditors, including
      the holders of GBH&#8217;s 11% notes and holders of administrative claims and to
      establish an approximate $330,000 fund to be distributed <i>pro rata</i> to
      holders of equity interests in GBH other than us and other Icahn affiliated
      entities. In addition, we and other Icahn affiliated entities received releases
      of all direct and derivative claims that could be asserted by GBH, its creditors
      and stockholders, including RSH. We expect to record a gain of $18 million
      in
      the first quarter of 2007 in connection with the settlement of these claims.
      All
      claims relating to GBH asserted by its creditors and RSH have now been
      resolved.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Declaration of
      Dividend on Depositary Units</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      February 27, 2007, the Board of Directors of AREP approved payment of a
      quarterly cash distribution of $0.10 per unit on its depositary units for the
      first quarter of 2007 consistent with the distribution policy established in
      2005. The distribution is payable on March 29, 2007 to depositary unitholders
      of
      record at the close of business on March 14, 2007.</div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 10pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-52</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 10pt; PAGE-BREAK-BEFORE: always" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong><a name="f53"></a>AMERICAN
  REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 10pt" align="center"><strong>CONSOLIDATED
      BALANCE SHEETS<br>(in $000s)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="352">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="40">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="1">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="470">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="65" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,
                2006</strong></div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="470">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="65">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>ASSETS</strong></div>
            </td>
            <td valign="top" width="13">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="top" width="13">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets:</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">2,331,421</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">1,912,134</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investments</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">563,552</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">539,115</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories,
                net</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">235,358</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">245,502</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Trade,
                notes and other receivables, net</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">169,841</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">176,496</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                current assets</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">76,389</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">134,987</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Assets
                of discontinued operations held for sale</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">48,205</div>
            </td>
            <td valign="top" width="13" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">47,503</div>
            </td>
            <td valign="top" width="1" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current assets</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,424,766</div>
            </td>
            <td valign="top" width="13" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,055,737</div>
            </td>
            <td valign="top" width="1" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment, net:</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">417,978</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">422,715</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">273,852</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">283,974</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">206,764</div>
            </td>
            <td valign="top" width="13" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">200,382</div>
            </td>
            <td valign="top" width="1" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                property, plant and equipment, net</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">898,594</div>
            </td>
            <td valign="top" width="13" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">907,071</div>
            </td>
            <td valign="top" width="1" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investments</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">199,693</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">177,682</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intangible
                assets</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">25,772</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">25,916</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                assets</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">81,314</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">85,237</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Total
                assets</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,630,139</div>
            </td>
            <td valign="top" width="13" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,251,643</div>
            </td>
            <td valign="top" width="1" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 3.35pt; PADDING-LEFT: 5.75pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 10.3pt" align="center"><strong>LIABILITIES
                AND PARTNERS&#8217; EQUITY</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities:</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">66,497</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">69,854</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accrued
                expenses and other current liabilities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">160,062</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">197,792</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                portion of long-term debt</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">23,620</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">23,970</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Securities
                sold not yet purchased</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8,682</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">25,398</div>
            </td>
            <td valign="top" width="1" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current liabilities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">258,861</div>
            </td>
            <td valign="top" width="13" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">317,014</div>
            </td>
            <td valign="top" width="1" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">1,666,211</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">1,175,271</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                non current liabilities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">23,738</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">22,212</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                long-term liabilities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,689,949</div>
            </td>
            <td valign="top" width="13" style="border-top: #ffffff 0.5pt solid; border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-top: #000000 0.5pt solid; border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,197,483</div>
            </td>
            <td valign="top" width="1" style="border-top: #ffffff 0.5pt solid; border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Total
                liabilities</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,948,810</div>
            </td>
            <td valign="top" width="13" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,514,497</div>
            </td>
            <td valign="top" width="1" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">198,019</div>
            </td>
            <td valign="top" width="13" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">292,221</div>
            </td>
            <td valign="top" width="1" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Commitments
                and contingencies (Note 16)</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Partners&#8217;
                equity:</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Limited
                partners</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">2,458,477</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">2,420,476</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 10pt">General
                partner</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24,833</div>
            </td>
            <td valign="top" width="13" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24,449</div>
            </td>
            <td valign="top" width="1" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Partners&#8217;
                equity</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,483,310</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,444,925</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Total
                liabilities and partners&#8217; equity</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,630,139</div>
            </td>
            <td valign="top" width="13" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,251,643</div>
            </td>
            <td valign="top" width="1" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 10pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-53</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 10pt; PAGE-BREAK-BEFORE: always" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong><a name="f54"></a>AMERICAN
  REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 10pt" align="center"><strong>CONSOLIDATED
      STATEMENTS OF OPERATIONS<br>Three Months Ended
      March&#160;31, 2007 and 2006</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="363">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="484">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td colspan="5" valign="bottom" width="121" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three&#160;Months&#160;Ended
                <br>March&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="484">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="484">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td colspan="5" valign="bottom" width="121">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)<br>(in
                $000s)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Revenues:</strong></div>
            </td>
            <td valign="top" width="14">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">112,888</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">85,945</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">27,887</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">20,712</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">210,604</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">243,490</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">351,379</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">350,147</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Expenses:</strong></div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">89,661</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">67,322</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">23,606</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">17,238</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">249,619</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">281,448</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">General
                and administrative expenses</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">7,668</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">11,145</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">370,554</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">377,153</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Operating
                loss</strong></div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(19,175</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(27,006</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                income (expense), net:</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(31,432</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(23,692</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                income</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">31,458</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">11,554</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                income (expense), net</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">84,781</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">21,309</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in earnings of affiliate</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Income
                (loss) from continuing operations before income taxes and minority
                interests</strong></div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">65,632</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(17,811</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                tax expense</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(6,949</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(5,211</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">11,590</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">15,069</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Income
                (loss) from continuing operations</strong></div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">70,273</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(7,953</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Discontinued
                operations:</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                from discontinued operations, net of income taxes</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">16,470</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">58,841</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interest</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(1,794</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">54</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gain
                on sales of assets, net of income taxes</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">13,185</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">251</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Income
                from discontinued operations, net of income taxes</strong></div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27,861</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">59,146</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                earnings</strong></div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">98,134</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">51,193</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                earnings attributable to:</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Limited
                partners</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">97,153</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">50,681</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="484">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">General
                partner</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">981</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">512</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="484">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">98,134</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">51,193</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 10pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-54</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 10pt; PAGE-BREAK-BEFORE: always" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong><a name="f55"></a>AMERICAN
  REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 10pt" align="center"><strong>CONSOLIDATED
      STATEMENT OF CHANGES<br>IN PARTNERS&#8217; EQUITY
      AND COMPREHENSIVE INCOME<br>Three Months Ended March&#160;31,
      2007<br>(Unaudited) (In $000s)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="283">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="10">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td rowspan="2" valign="bottom" width="378">&#160;</td>
            <td rowspan="2" valign="top" width="14">&#160;</td>
            <td colspan="2" rowspan="2" valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><br><strong>General<br>Partner&#8217;s
<br>Equity
                <br>(Deficit)</strong></div>
            </td>
            <td rowspan="2" valign="bottom" width="14">&#160;</td>
            <td colspan="2" rowspan="2" valign="bottom" width="65" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Limited
<br>Partners&#8217;
<br>Equity
<br>Depositary
                <br>Units</strong></div>
            </td>
            <td rowspan="2" valign="bottom" width="14">&#160;</td>
            <td rowspan="2" valign="top" width="14">&#160;</td>
            <td colspan="2" rowspan="2" valign="bottom" width="65" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><br><br><strong>Total
<br>Partners&#8217;
                <br>Equity</strong></div>
            </td>
            <td rowspan="2" valign="bottom" width="5">&#160;</td>
          </tr>
          <tr>
            <td>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="378">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td colspan="10" valign="bottom" width="231">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="378">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance,
                December 31, 2006</div>
            </td>
            <td valign="top" width="14">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">24,449</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">2,420,476</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">2,444,925</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="378">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cumulative
                effect of adjustment from adoption of SFAS No. 159</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(422</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(41,762</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(42,184</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="378">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Comprehensive
                income:</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="378">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                earnings</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">981</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">97,153</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="14">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">98,134</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="378">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                unrealized losses on securities available for sale</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(114</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(11,315</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(11,429</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="378">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Comprehensive
                income</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">867</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">85,838</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">86,705</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="378">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Partnership
                distribution</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(63</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(6,248</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(6,311</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="378">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">173</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">175</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="378">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance,
                March&#160;31, 2007</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">24,833</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,458,477</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,483,310</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Accumulated
      other comprehensive income at March&#160;31, 2007 was $13.9 million.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-55</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong><a name="f56"></a>AMERICAN
  REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 10pt" align="center"><strong>CONSOLIDATED
      STATEMENTS OF CASH FLOWS<br>Three Months Ended
      March&#160;31, 2007 and 2006</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="344">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="45">
            </td>
            <td width="10">
            </td>
            <td width="6">
            </td>
            <td width="43">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="459">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="459">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="5" valign="bottom" width="146">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)<br>(in
                $000s)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Operating Activities:</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="66">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="66">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Continuing Operations:</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) from continuing operations</div>
            </td>
            <td valign="top" width="13">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">70,273</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(7,953</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Adjustments
                to reconcile net earnings to net cash provided by operating
                activities:</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">16,166</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">18,355</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investment
                gains</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">(79,410</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(13,750</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">(11,590</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(15,069</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in earnings of affiliate</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(24</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Stock-based
                compensation expense</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">6,248</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                income tax expense (benefit)</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">362</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(384</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Impairment
                loss on fixed assets</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">313</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">7,828</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash used in activities on trading securities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">(14,866</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(40,671</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">4,785</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">2,802</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Changes
                in operating assets and liabilities:</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">(Increase)
                decrease in trade notes and other receivables</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">(6,602</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">20,107</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Increase
                in other assets</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">(1,164</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(32,228</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Decrease
                (increase) in inventory</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">10,144</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(31,246</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Increase
                (decrease) in accounts payable, accrued expenses and other
                liabilities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">63</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(2,743</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash used in continuing operations</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(11,526</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(88,728</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Discontinued Operations:</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                from discontinued operations</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">27,861</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">59,146</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation,
                depletion and amortization</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">194</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">28,124</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in fair market value of Oil and Gas derivative contracts</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(37,252</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Changes
                in operating assets and liabilities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">5,240</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gains
                on sales of assets</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">(13,185</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(15,471</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,708</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash (used in) provided by discontinued operations</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(601</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">58,966</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                cash used in operating activities</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(12,126</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(29,762</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Investing Activities:</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Continuing Operations:</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
                expenditures</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">(16,898</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(5,221</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Purchases
                of marketable equity and debt securities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">(75,671</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(72,378</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from sales of marketable equity and debt securities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">51,471</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">44,056</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds from sales and disposition of fixed assets</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">6,775</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">7,094</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(18</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash used in investing activities &#8211; continuing operations</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(34,323</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(26,467</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Discontinued Operations:</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
                expenditures</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(51,476</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds from the sales of real estate</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">4,359</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">991</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Purchase
                of minority interest of investment in subsidiary</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">(47,283</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Release
                of escrow funds relating to asset sales</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">50,000</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(7,319</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(387</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash used in investing activities &#8211; discontinued operations</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(243</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(50,872</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="459">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                cash used in investing activities</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(34,566</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(77,339</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-56</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES </strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 10pt" align="center"><strong>CONSOLIDATED
      STATEMENTS OF CASH FLOWS &#8211;
(continued)<br>Three Months Ended March&#160;31, 2007 and 2006</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="350">
            </td>
            <td width="7">
            </td>
            <td width="5">
            </td>
            <td width="45">
            </td>
            <td width="6">
            </td>
            <td width="6">
            </td>
            <td width="44">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="467">&#160;</td>
            <td valign="top" width="10">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="467">&#160;</td>
            <td valign="top" width="10">&#160;</td>
            <td colspan="5" valign="bottom" width="142">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)<br>(in
                $000s)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Financing Activities:</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td colspan="2" valign="bottom" width="66">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td colspan="2" valign="bottom" width="66">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows Continuing Operations:</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Partners&#8217;
                equity:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Partnership
                distributions</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="top" width="60">
              <div style="MARGIN: 0pt" align="right">(6,311</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="top" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="top" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Dividend
                paid to minority holders of subsidiary</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="top" width="60">
              <div style="MARGIN: 0pt" align="right">(18,451</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="top" width="8">&#160;</td>
            <td valign="top" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Debt:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="top" width="60">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="top" width="8">&#160;</td>
            <td valign="top" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                change in due to/from affiliates</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="top" width="60">
              <div style="MARGIN: 0pt" align="right">679</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="top" width="8">&#160;</td>
            <td valign="top" width="58">
              <div style="MARGIN: 0pt" align="right">(3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from senior notes payable</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="top" width="60">
              <div style="MARGIN: 0pt" align="right">492,130</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="top" width="8">&#160;</td>
            <td valign="top" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Repayment
                of credit facilities</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="top" width="60">
              <div style="MARGIN: 0pt" align="right">(127</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="top" width="8">&#160;</td>
            <td valign="top" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Periodic
                principal payments</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,262</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="top" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,098</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 3.35pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash provided by (used in) financing activities &#8211; continuing
                operations</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt" align="right">466,658</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="top" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt" align="right">(1,101</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash used in financing activities &#8211; discontinued operations</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="top" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(3,075</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                Cash Provided by (used in) Financing Activities</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">466,658</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="top" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(4,176</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                increase (decrease) in cash and cash equivalents</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="top" width="60">
              <div style="MARGIN: 0pt" align="right">419,965</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="top" width="8">&#160;</td>
            <td valign="top" width="58">
              <div style="MARGIN: 0pt" align="right">(111,277</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                change in cash of assets held for sale</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="top" width="60">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="top" width="8">&#160;</td>
            <td valign="top" width="58">
              <div style="MARGIN: 0pt" align="right">37,112</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents, beginning of period</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,911,456</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="top" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="top" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">459,315</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents, end of period</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="top" width="60" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,331,421</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="top" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="top" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">385,150</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="top" width="60">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="top" width="8">&#160;</td>
            <td valign="top" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Supplemental
                information</strong></div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="top" width="60">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="top" width="8">&#160;</td>
            <td valign="top" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                payments for interest</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="top" width="60">
              <div style="MARGIN: 0pt" align="right">45,982</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="top" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="top" width="58">
              <div style="MARGIN: 0pt" align="right">26,950</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                payments for income taxes, net of refunds</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="top" width="60">
              <div style="MARGIN: 0pt" align="right">3,429</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="top" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="top" width="58">
              <div style="MARGIN: 0pt" align="right">798</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                unrealized losses on securities available for sale</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="top" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="top" width="60">
              <div style="MARGIN: 0pt" align="right">(11,429</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="top" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="top" width="58">
              <div style="MARGIN: 0pt" align="right">(10,751</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-57</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong><a name="f58"></a>AMERICAN
  REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND SUBSIDIARIES </strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 1 &#8212;
General</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">American
      Real Estate Holdings Limited Partnership, or the Company or AREH, is a
      diversified holding company owning subsidiaries engaged in the following
      continuing operating businesses: Gaming; Real Estate; and Home Fashion. In
      November 2006, we divested our Oil and Gas operating business and our Atlantic
      City gaming properties. Further information regarding our reportable segments
      is
      contained in Note 14. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREH
      is a
      limited partnership formed in Delaware on February 17, 1987. American Real
      Estate Partners, L.P. (&#8220;AREP&#8221; or the &#8220;Limited Partner&#8221;) is a master limited
      partnership formed in Delaware on February 17, 1987. AREP owns a 99% limited
      partner interest in the Company. American Property Investors, Inc. (the &#8220;General
      Partner&#8221;) owns a 1% general partner interest in both AREH and AREP representing
      an aggregate 1.99% general partner interest in the Company and AREP. The General
      Partner is owned and controlled by Mr. Carl C. Icahn (&#8220;Icahn or Mr. Icahn&#8221;).
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Under
      our
      amended Partnership Agreement we are permitted to make non-real estate
      acquisitions and investments to enhance our partners&#8217; value and further
      diversify our assets. Investments may include equity and debt securities of
      domestic and foreign issuers. The portion of the Company&#8217;s assets invested in
      any one type of security or any single issuer is not limited. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We will
      conduct our activities in such a manner as not to be deemed an investment
      company under the Investment Company Act of 1940, or the 1940 ACT. Generally,
      this means that no more than 40% of the Company&#8217;s total assets will be invested
      in investment securities, as such term is defined in the 1940 ACT. In addition,
      we do not intend to invest in securities as our primary business. We will
      structure our investments to continue to be taxed as a partnership rather than
      as a corporation under the applicable publicly traded partnership rules of
      the
      Internal Revenue Code. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Gaming Acquisition
      and Pending Divestiture</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      November 28, 2005, AREP Laughlin Corporation entered into an agreement to
      purchase the Flamingo Laughlin Hotel and Casino, now known as the Aquarius
      Casino Resort, or the Aquarius, in Laughlin, Nevada from Harrah&#8217;s Operating
      Company, Inc. AREP Laughlin Corporation was formed by AREH to acquire, own
      and
      operate the Aquarius, and AREH contributed 100% of the stock of AREP Laughlin
      to
      American Casino and Entertainment Properties LLC, or ACEP, our indirect wholly
      owned subsidiary, on April 4, 2006. The transaction was approved by the Nevada
      Gaming Commission upon recommendation of the Nevada Gaming Control Board and
      closed on May 19, 2006. Accordingly, our financial statements include the
      financial position and results of operations of the Aquarius from May 19, 2006
      forward.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      discussed in Note 18, on April 22, 2007, we entered into an agreement to sell
      all of the issued and outstanding membership interests of ACEP, which comprise
      all of our current gaming properties. Accordingly, in the second quarter of
      fiscal 2007 the financial position and the results of ACEP&#8217;s operations will be
      presented as assets and liabilities of discontinued operations held for sale
      in
      the consolidated balance sheets and discontinued operations in the consolidated
      statements of operations for all periods in accordance with SFAS No. 144.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-58</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt; PAGE-BREAK-BEFORE: always" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 1 &#8212; General &#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Discontinued
      Operations</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      November 17, 2006, our indirect majority owned subsidiary, Atlantic Coast
      Entertainment Holdings, Inc., or Atlantic Coast, completed the sale to Pinnacle
      Entertainment, Inc., or Pinnacle, of the outstanding membership interests in
      ACE
      Gaming LLC or ACE, the owner of The Sands Hotel and Casino, or The Sands, in
      Atlantic City, New Jersey, and 100% of the equity interests in certain
      subsidiaries of AREH that owned parcels of real estate adjacent to The Sands,
      including the Traymore site, to Pinnacle.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      November 21, 2006, our indirect wholly owned subsidiary, AREP O &amp; G Holdings
      LLC, consummated the sale of all of the issued and outstanding membership
      interests of NEG Oil &amp; Gas LLC, or NEG Oil &amp; Gas, to SandRidge Energy,
      Inc. or SandRidge, formerly Riata Energy, Inc.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Operating
      properties of our real estate segment are reclassified to held for sale when
      subject to a contract or letter of intent. The operations of such properties
      are
      classified as discontinued operations. The properties classified as discontinued
      operations have changed during fiscal 2007 and, accordingly, certain amounts
      in
      the statement of operations and cash flows for the three months ended
      March&#160;31, 2007 and 2006 have been reclassified to conform to the current
      classification of properties. During the first quarter of 2007 two properties
      were reclassified to held for sale.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      financial position and results of these operations are presented as assets
      and
      liabilities of discontinued operations held for sale in the consolidated balance
      sheets and discontinued operations in the consolidated statements of
      operations.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Filing Status
      of
      Subsidiaries</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">National
      Energy Group, Inc., or NEGI, and Atlantic Coast are reporting companies under
      the Securities Exchange Act of 1934, as amended, or the, &#8216;34 Act. In addition,
      ACEP voluntarily files annual, quarterly and current reports under the, &#8216;34
      Act.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>New Accounting
      Pronouncements</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><strong>SFAS
      No. 155.</strong> On February 16, 2006, the FASB issued Statement No. 155,
<i>Accounting for Certain Hybrid Instruments &#8211; an Amendment of FASB Statements
      No. 133 and 140</i> (&#8220;SFAS 155&#8221;). The statement amends Statement 133 to permit
      fair value measurement for certain hybrid financial instruments that contain
      an
      embedded derivative, provides additional guidance on the applicability of SFAS
      133 and 140 to certain financial instruments and subordinated concentrations
      of
      credit risk. The new standard is effective for the first fiscal year beginning
      after September 15, 2006. The adoption of SFAS 155 as of January 1, 2007 did
      not
      have any impact on our consolidated financial statements.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><strong>EITF
      06-3.</strong> In June 2006, the Emerging Issues Task Force (&#8220;EITF&#8221;) issued EITF
      06-3, &#8220;How Taxes Collected from Customers and Remitted to Governmental
      Authorities Should Be Presented in the Income Statement (That is, Gross versus
      Net Presentation)&#8221; to clarify diversity in practice on the presentation of
      different types of taxes in the financial statements. The EITF concluded that,
      for taxes within the scope of the issue, a company may adopt a policy of
      presenting taxes either gross within revenue or net. That is, it may include
      charges to customers for taxes within revenues and the charge for the taxes
      from
      the taxing authority within cost of sales, or, alternatively, it may net the
      charge to the customer and the charge from the taxing authority. If taxes are
      reported on a gross basis, and are significant, an entity should disclose the
      amounts of those taxes subject to EITF 06-3. The guidance is effective for
      periods beginning after December 15, 2006. We present sales tax on a net basis
      in our consolidated financial statements, and the adoption of EITF 06-3 did
      not
      have any impact on our financial position, results of operations, or cash
      flows.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-59</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 1 &#8212; General &#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><strong>FIN
      No. 48.</strong> In July 2006, the FASB issued FASB Interpretation No. 48,
<i>Accounting for Uncertainty in Income Taxes &#8211; an Interpretation of FASB
      Statement 109</i> (&#8220;FIN 48&#8221;), which clarifies the accounting for uncertainty in
      tax positions taken or expected to be taken in a tax return, including issues
      relating to financial statement recognition and measurement. FIN 48 provides
      that the tax effects from an uncertain tax position can be recognized in the
      financial statements only if the position is &#8220;more-likely-than-not&#8221; to be
      sustained if the position were to be challenged by a taxing authority. The
      assessment of the tax position is based solely on the technical merits of the
      position, without regard to the likelihood that the tax position may be
      challenged. If an uncertain tax position meets the &#8220;more-likely-than-not&#8221;
threshold, the largest amount of tax benefit that is greater than 50 percent
      likely to be recognized upon ultimate settlement with the taxing authority
      is
      recorded. The provisions of FIN 48 are effective for fiscal years beginning
      after December 15, 2006, with the cumulative effect of the change in accounting
      principle recorded as an adjustment to opening retained earnings. We adopted
      FIN
      48 as of January 1, 2007. The adoption of FIN 48 did not have a material impact
      on our consolidated financial statements. See Note 15 for additional
      information.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><strong>SFAS
      No. 157.</strong> In September 2006, the FASB issued FASB Statement No. 157,
<i>Fair Value Measurements</i> (&#8220;SFAS 157&#8221;), which defines fair value,
      establishes a framework for measuring fair value in generally accepted
      accounting principles, and expands disclosures about fair value measurements.
      This statement applies under other accounting pronouncements that require or
      permit fair value measurements and, accordingly, SFAS 157 does not require
      any
      new fair value measurements. We adopted SFAS 157 as of January 1, 2007, in
      conjunction with the adoption of SFAS No. 159, as required. The adoption of
      SFAS
      157 did not have any impact on our consolidated financial statements.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><strong>SFAS
      No. 159.</strong> In February 2007, the FASB issued SFAS No. 159, <i>The Fair
      Value Option for Financial Assets and Financial Liabilities &#8211; Including an
      Amendment of FASB Statement No. 115</i> (&#8220;SFAS 159&#8221;), which gives entities the
      option to measure eligible financial assets, financial liabilities and firm
      commitments at fair value (i.e., the fair value option), on an
      instrument-by-instrument basis, that are otherwise not permitted to be accounted
      for at fair value under other accounting standards. The election to use the
      fair
      value option is available when an entity first recognizes a financial asset
      or
      financial liability or upon entering into a firm commitment. Subsequent changes
      in fair value must be recorded in earnings. Additionally, SFAS 159 allows for
      a
      one-time election for existing positions upon adoption, with the transition
      adjustment recorded to beginning partners&#8217; equity.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We adopted
      SFAS 159 as of January 1, 2007 and elected to apply the fair value option to
      our
      investment in ImClone Systems Incorporated, or ImClone. In the fourth quarter
      of
      the fiscal year ended December 31, 2006, we first applied the equity method
      of
      accounting to our investment in ImClone due to changes in ImClone&#8217;s board
      resulting in our having the ability to exercise significant influence over
      ImClone. We believe that the quality of the earnings and the value of the
      investment that we report over time relating to our investment in ImClone is
      more accurately reflected by the market value methodology of SFAS 159 rather
      than the equity method of accounting. The equity method of accounting would
      require an appraisal of the fair values of ImClone&#8217;s assets and liabilities at
      the dates that we acquired shares of common stock of ImClone as well as future
      appraisals should there be any material indications of impairment. We believe
      that such an appraisal would be subjective given the nature of ImClone&#8217;s
      pharmaceutical operations.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of the
      date of adoption, the carrying value of our investment in ImClone was
      approximately $164.3 million and the fair value of our investment was
      approximately $122.2 million. In accordance with the transition requirements
      of
      SFAS 159, we recorded a cumulative effect adjustment to beginning partners&#8217;
equity for the difference between the fair value and carrying value on the
      date
      of adoption, which reduced partners&#8217; equity by approximately $42.2
      million.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As a result
      of the adoption of SFAS 159, we are required to record unrealized gains or
      losses for the change in fair value of our investment in ImClone. During the
      three-month period ended March&#160;31, 2007, we recorded approximately $63.9
      million of unrealized gains resulting from the change in the market value of
      ImClone&#8217;s stock which is recorded as a component of other income (expense), net
      in the consolidated statement of operations.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-60</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 2 &#8212; Operating
      Units</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Through
      the second quarter of the fiscal year ended December 31, 2006, or fiscal 2006,
      we had four principal operating businesses: Oil and Gas, Gaming, Real Estate
      and
      Home Fashion. As described in Note 3, in November 2006 we divested our Oil
      and
      Gas operating businesses and our Atlantic City Gaming properties. As a result,
      our Oil and Gas operations and our Atlantic City Gaming properties are now
      classified as discontinued operations and thus are not considered a reportable
      segment of our continuing operations. We now have three principal operating
      businesses: Gaming, Real Estate and Home Fashion.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>a.
      Gaming</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We own
      and operate gaming properties in Nevada. Our properties include the Stratosphere
      Casino Hotel and Tower, Arizona Charlie&#8217;s Decatur, and Arizona Charlie&#8217;s Boulder
      in Las Vegas and the Aquarius Casino Resort in Laughlin. Results for the
      Aquarius are included from the date of acquisition, May 19, 2006. As described
      above, in November 2006, we sold our Atlantic City Gaming properties. As a
      result, such operations are now classified as discontinued operations.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Summary
      balance sheets for the continuing operations of our Gaming segment as of
      March&#160;31, 2007 and December 31, 2006 as included in the consolidated
      balance sheets are as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="259">
            </td>
            <td width="10">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
            <td width="10">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
            <td width="1">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="346">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>&#160;&#160;&#160;March&#160;31,&#160;&#160;&#160;<br>2007</strong></div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="346">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="62">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="346">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets</div>
            </td>
            <td valign="top" width="13">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">98,667</div>
            </td>
            <td valign="top" width="13">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">85,583</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="346">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment, net</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">417,978</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">422,715</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="346">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                non-current assets</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">44,001</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">44,455</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="346">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                assets</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">560,646</div>
            </td>
            <td valign="top" width="13" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">552,753</div>
            </td>
            <td valign="top" width="1" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="346">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">50,614</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">54,763</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="346">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">257,202</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">257,329</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="346">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                non-current liabilities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,144</div>
            </td>
            <td valign="top" width="13" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5,993</div>
            </td>
            <td valign="top" width="1" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="346">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                liabilities</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">313,960</div>
            </td>
            <td valign="top" width="13" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">318,085</div>
            </td>
            <td valign="top" width="1" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      discussed in Note 18, on April 22, 2007, we entered into an agreement to sell
      all of the issued and outstanding membership interests of ACEP for $1.3 billion,
      plus or minus certain adjustments such as working capital. Accordingly, in
      the
      second quarter of fiscal 2007 the financial position and the results of ACEP&#8217;s
      operations will be presented as assets and liabilities of discontinued
      operations held for sale in the consolidated balance sheets and discontinued
      operations in the consolidated statements of operations for all periods in
      accordance with SFAS No. 144.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-61</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>Note 2 &#8212; Operating
      Units &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Summarized
      unaudited statements of operations for the continuing operations of our Gaming
      segment for the three months ended March&#160;31, 2007 and 2006 are as follows
      (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="312">
            </td>
            <td width="17">
            </td>
            <td width="8">
            </td>
            <td width="55">
            </td>
            <td width="17">
            </td>
            <td width="8">
            </td>
            <td width="46">
            </td>
            <td width="1">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="417">&#160;</td>
            <td valign="top" width="22">&#160;</td>
            <td colspan="5" valign="bottom" width="181" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three&#160;Months&#160;Ended
                <br>March&#160;31,</strong></div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="417">&#160;</td>
            <td valign="top" width="22">&#160;</td>
            <td colspan="2" valign="bottom" width="85" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td colspan="2" valign="bottom" width="73" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues:</div>
            </td>
            <td valign="top" width="22">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="74">&#160;</td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Casino
                </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="74">
              <div style="MARGIN: 0pt" align="right">67,370</div>
            </td>
            <td valign="top" width="22">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">48,022</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Hotel
                </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="74">
              <div style="MARGIN: 0pt" align="right">22,616 </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">17,433</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Food
                and beverage</div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="74">
              <div style="MARGIN: 0pt" align="right">23,109 </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">18,070</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Tower,
                retail and other income</div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="74" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9,311 </div>
            </td>
            <td valign="top" width="22" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8,219</div>
            </td>
            <td valign="top" width="2" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gross
                revenues </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="74">
              <div style="MARGIN: 0pt" align="right">122,406 </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">91,744</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                promotional allowances</div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="74" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9,518 </div>
            </td>
            <td valign="top" width="22" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5,799</div>
            </td>
            <td valign="top" width="2" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                revenues </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="74" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">112,888 </div>
            </td>
            <td valign="top" width="22" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">85,945</div>
            </td>
            <td valign="top" width="2" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expenses:</div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="74">&#160;</td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Casino
                </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="74">
              <div style="MARGIN: 0pt" align="right">22,566 </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">16,488</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Hotel
                </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="74">
              <div style="MARGIN: 0pt" align="right">9,063 </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">6,843</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Food
                and beverage </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="74">
              <div style="MARGIN: 0pt" align="right">15,975 </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">13,201</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Tower,
                retail and other income </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="74">
              <div style="MARGIN: 0pt" align="right">4,244 </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">4,248</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Selling,
                general and administrative </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="74">
              <div style="MARGIN: 0pt" align="right">29,472 </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">20,782</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="74" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8,341 </div>
            </td>
            <td valign="top" width="22" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5,760</div>
            </td>
            <td valign="top" width="2" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                costs and expenses </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="74" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">89,661 </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">67,322</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="417">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                income from continuing operations </div>
            </td>
            <td valign="top" width="22">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="74" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">23,227 </div>
            </td>
            <td valign="top" width="22" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="62" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">18,623</div>
            </td>
            <td valign="top" width="2" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>b. Real
      Estate</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Our real
      estate operations consist of three segments: rental real estate, property
      development and associated resort activities.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of real estate property and equipment as of March&#160;31, 2007 and
      December 31, 2006 as included in the consolidated balance sheets is as follows
      (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="335">
            </td>
            <td width="13">
            </td>
            <td width="7">
            </td>
            <td width="47">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="43">
            </td>
            <td width="1">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="446">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="73" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>&#160;&#160;&#160;&#160;March&#160;31,&#160;&#160;&#160;&#160;<br>2007</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,
<br>2006</strong></div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="446">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="73">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                properties:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="63">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Finance
                leases, net </div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">65,302</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">66,335</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                leases </div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">41,653</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">46,170</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                development </div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">122,306</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">126,537</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                properties </div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">44,591</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">44,932</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                real estate </div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="63" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">273,852</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="57" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">283,974</div>
            </td>
            <td valign="top" width="1" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-62</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 2 &#8212; Operating
      Units &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: 18pt">Summarized
      unaudited statements of operations attributable to our continuing real estate
      operations are as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="346">
            </td>
            <td width="8">
            </td>
            <td width="44">
            </td>
            <td width="14">
            </td>
            <td width="8">
            </td>
            <td width="44">
            </td>
            <td width="1">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="462">&#160;</td>
            <td colspan="5" valign="bottom" width="160" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three&#160;Months&#160;Ended
                <br>March&#160;31,</strong></div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="462">&#160;</td>
            <td colspan="2" valign="bottom" width="70" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="70" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="462">&#160;</td>
            <td colspan="2" valign="bottom" width="70">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="70">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Rental
                real estate:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                income on financing leases </div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,578</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,735</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                income </div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,939</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,511</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                development </div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">18,145</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">11,384</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                activities</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,225</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,082</div>
            </td>
            <td valign="top" width="1" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                revenues </div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27,887</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">20,712</div>
            </td>
            <td valign="top" width="1" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                expenses:</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                real estate </div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,493</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">998</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                development </div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">15,612</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">9,976</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                activities</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,501</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,264</div>
            </td>
            <td valign="top" width="1" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                expenses </div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">23,606</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">17,238</div>
            </td>
            <td valign="top" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="462">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                income </div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,281</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">3,474</div>
            </td>
            <td valign="top" width="1" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt"><strong>Rental
      Real Estate</strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      March&#160;31, 2007, we owned 36 rental real estate properties. These primarily
      consist of fee and leasehold interests in real estate in 18 states. Most of
      these properties are net-leased to single corporate tenants. Approximately
      89%
      of these properties are currently net-leased, 3% are operating properties and
      8%
      are vacant.</div>
    <div style="MARGIN-TOP: 10pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt"><strong>Property
      Held for Sale</strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: 18pt">The
      following is a summary of property held for sale (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="277">
            </td>
            <td width="7">
            </td>
            <td width="29">
            </td>
            <td width="10">
            </td>
            <td width="9">
            </td>
            <td width="36">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="370">&#160;</td>
            <td colspan="2" valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,
<br>2006</strong></div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="370">&#160;</td>
            <td colspan="2" valign="bottom" width="49">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="370">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Leased
                to others</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">34,653</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">28,015</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="370">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Vacant</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">703</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">703</div>
            </td>
            <td valign="top" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="370">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">35,356</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">28,718</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="370">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less:
                accumulated depreciation</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#160;(8,097</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#160;(5,053</div>
            </td>
            <td valign="top" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="370">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">27,259</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">23,665</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">At
      March&#160;31, 2007 and December 31, 2006, $19.8 million of real estate held for
      sale was pledged to collateralize the payment of non-recourse mortgages
      payable.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: 18pt">We market
      portions of our commercial real estate portfolio for sale. Unaudited sales
      activity was as follows (in $000s, except unit data):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="248">
            </td>
            <td width="10">
            </td>
            <td width="9">
            </td>
            <td width="44">
            </td>
            <td width="19">
            </td>
            <td width="9">
            </td>
            <td width="29">
            </td>
            <td width="1">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="331">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="5" valign="bottom" width="152" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three&#160;Months&#160;Ended
                <br>March&#160;31,</strong></div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="331">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="72" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="bottom" width="26">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="331">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="26">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Properties
                sold </div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1</div>
            </td>
            <td valign="bottom" width="26">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">4</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                received </div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">4,359</div>
            </td>
            <td valign="bottom" width="26">&#160;</td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">973</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                gain recorded </div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">3,862</div>
            </td>
            <td valign="bottom" width="26">&#160;</td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">251</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gain
                recorded in discontinued operations </div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">3,862</div>
            </td>
            <td valign="bottom" width="26">&#160;</td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">251</div>
            </td>
            <td valign="top" width="2">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-63</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>Note 2 &#8212; Operating
      Units &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt"><strong>Property
      Development and Associated Resort Activities</strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We own,
      primarily through our Bayswater subsidiary, residential development properties.
      Bayswater, a real estate investment, management and development company, focuses
      primarily on the construction and sale of single-family houses, multi-family
      homes and lots in subdivisions and planned communities and raw land for
      residential development. Our New Seabury development property in Cape Cod,
      Massachusetts and our Grand Harbor and Oak Harbor development property in Vero
      Beach, Florida each include land for future residential development of more
      than
      400 and 1,000 units of residential housing, respectively. Both developments
      operate golf and resort activities. We are also developing residential
      communities in Naples, Florida and Westchester County, New York.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: 18pt">Unaudited
      property development sales activity was as follows (in 000s except unit
      data):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="311">
            </td>
            <td width="16">
            </td>
            <td width="6">
            </td>
            <td width="52">
            </td>
            <td width="21">
            </td>
            <td width="6">
            </td>
            <td width="52">
            </td>
            <td width="1">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="415">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="5" valign="bottom" width="184" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three&#160;Months&#160;Ended
                <br>March&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="415">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="77" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td colspan="2" valign="bottom" width="78" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="415">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">&#160;</td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Units
                sold:</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">&#160;</td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">New
                Seabury, Massachusetts </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">6</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">10</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Grand
                Harbor/Oak Harbor, Florida </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">5</div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">2</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Falling
                Waters, Florida </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">23</div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Westchester,
                New York </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">2</div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Tampa
                Bay, Florida </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1</div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="415">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="69" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">37</div>
            </td>
            <td valign="bottom" width="28" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="69" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">12</div>
            </td>
            <td valign="bottom" width="1" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues:</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">&#160;</td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">New
                Seabury, Massachusetts </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">3,583</div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">9,033</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Grand
                Harbor/Oak Harbor, Florida </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">4,349</div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">2,321</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Falling
                Waters, Florida </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">5,466</div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Westchester,
                New York </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">3,243</div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">30</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="415">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Tampa
                Bay, Florida</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,504</div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="415">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="69" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">18,145</div>
            </td>
            <td valign="bottom" width="28" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="69" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">11,384</div>
            </td>
            <td valign="bottom" width="1" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>c. Home
      Fashion</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      conduct our Home Fashion operations through our majority ownership in West
      Point
      International Inc., or WPI, a manufacturer and distributor of home fashion
      consumer products.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Summary
      balance sheets for Home Fashion as of March&#160;31, 2007 and December 31, 2006
      as included in the consolidated balance sheets are as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="264">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="41">
            </td>
            <td width="1">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="352">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,
<br>2007</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,
<br>2006</strong></div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="352">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="352">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets </div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">533,815</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">567,419 </div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="352">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Assets
                held for sale </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">20,946 </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">23,838 </div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="352">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                plant and equipment, net </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">206,764 </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">200,382 </div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="352">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intangible
                and other assets </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38,333 </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38,199</div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="352">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                assets </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">799,858 </div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">829,838</div>
            </td>
            <td valign="bottom" width="1" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="352">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">107,447 </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">101,609 </div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="352">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                liabilities </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,941 </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8,980 </div>
            </td>
            <td valign="bottom" width="1">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="352">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                liabilities </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">114,388 </div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">110,589 </div>
            </td>
            <td valign="bottom" width="1" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br></div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-64</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>Note 2 &#8212; Operating
      Units &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Unaudited
      summarized statements of operations for the three months ended March&#160;31,
      2007 and 2006 are as follows (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="276">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="368">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="5" valign="bottom" width="113" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended
                <br>March&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="368">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="368">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="368">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                sales</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">210,604</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">243,490</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="368">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 5.75pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 10.3pt">Cost
                of goods sold</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">205,910</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: white 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">228,360</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="368">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 5.75pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 10.3pt">Gross
                earnings</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">4,694</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">15,130</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="368">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 5.75pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 10.3pt">Selling,
                general and administrative expenses</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">39,398</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">43,317</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="368">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 5.75pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 10.3pt">Restructuring
                and impairment charges </div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,311</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9,771</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="368">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 5.75pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 10.3pt">Operating
                loss</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(39,015</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(37,958</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Total
      depreciation for the three months ended March&#160;31, 2007 was $4.8 million, of
      which $3.7 million was included in cost of sales and $1.1 million was included
      in selling, general and administrative expenses. Total depreciation for the
      three months ended March&#160;31, 2006 was $10.4 million, of which $8.6 million
      was included in cost of sales and $1.8 million was included in selling, general
      and administrative expenses. Total expenses for the three months ended
      March&#160;31, 2007 include $4.3 million of restructuring charges (of which
      approximately $1.3&#160;million relates to severance and $3.0 million relates to
      continuing costs of closed plants). There were no impairment charges recorded
      in
      the first quarter of fiscal 2007. Total expenses for the three months ended
      March&#160;31, 2006 include $9.8 million of restructuring charges (of which
      approximately $1.2 million related to severance, $0.9 million related to
      continuing costs of closed plants and $7.7 million related to non-cash charges
      for impairment of fixed assets).</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Impairment
      and
      restructuring charges for the three months ended March&#160;31, 2007 and 2006
      are included in Home Fashion operating expenses in the accompanying consolidated
      statements of operations.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">To improve
      WPI&#8217;s competitive position, we intend to continue to restructure its operations
      to significantly reduce its cost of goods sold by closing certain plants located
      in the United States, sourcing goods from lower cost overseas facilities and,
      potentially, acquiring manufacturing facilities outside of the United States.
      WPI has incurred impairment charges to write-down the value of WPI plants taken
      out of service to its estimated liquidation value.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Included
      in
      restructuring expenses are cash charges associated with the ongoing costs of
      closed plants, employee severance, benefits and related costs. The amount of
      the
      accrued liability balance was $1.2 million as of December&#160;31, 2006. During
      the three months ended March&#160;31, 2007, we incurred additional restructuring
      costs of $4.3 million, and $4.5 million was paid during the period. As of
      March&#160;31, 2007, the accrued liability balance was $1.0 million, which is
      included in accounts payable and accrued expenses in our consolidated balance
      sheet.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Total
      cumulative impairment and restructuring charges for the period from our
      acquisition of WPI on August 8, 2005, through March&#160;31, 2007, were $51.6
      million.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We expect
      that restructuring charges will continue to be incurred throughout fiscal 2007.
      As of March&#160;31, 2007, WPI expects to incur additional restructuring costs
      over the next year relating to the current restructuring plan of between $25
      million and $30 million.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-65</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 3 &#8212; Discontinued
      Operations and Assets Held for Sale</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>The Sands and
      Related Assets</i></strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On November
      17, 2006, Atlantic Coast, ACE, AREH, and certain other entities owned by or
      affiliated with AREH completed the sale to Pinnacle of the outstanding
      membership interests in ACE and 100% of the equity interests in certain
      subsidiaries of AREH that own parcels of real estate adjacent to The Sands,
      including 7.7 acres of land adjacent to The Sands known as the Traymore site.
      We
      owned, through subsidiaries, approximately 67.6% of Atlantic Coast, which owned
      100% of ACE. The aggregate price was approximately $274.8 million, of which
      approximately $200.6 million was paid to Atlantic Coast and approximately $74.2
      million was paid to affiliates of AREH for subsidiaries that owned the Traymore
      site and the adjacent properties. Under the terms of the agreement, $51.8
      million of the purchase price paid to Atlantic Coast was deposited into escrow
      to fund indemnification obligations with regard to the claims of creditors
      and
      stockholders of GB Holdings, Inc., or GB Holdings. On February 22, 2007 we
      resolved all outstanding litigation involving our interest in our Atlantic
      City
      gaming operations resulting in a release of all claims against us. As a result
      of the settlement, our ownership of Atlantic Coast increased from 67.6% to
      96.9%
      and $50.0 million of the amount placed into escrow was released to us.</div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 0pt"><strong><i>Oil and Gas
      Operations</i></strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On November
      21, 2006, our indirect wholly owned subsidiary, AREP O &amp; G Holdings, LLC,
      consummated the sale of all of the issued and outstanding membership interests
      of NEG Oil &amp; Gas to SandRidge, for consideration consisting of $1.025
      billion in cash, 12,842,000 shares of SandRidge&#8217;s common stock valued, at the
      date of closing, at $18 per share, and the repayment by SandRidge of $300.0
      million of debt of NEG Oil &amp; Gas. On April 4, 2007, we sold our entire
      position in SandRidge for cash consideration of approximately $243.2
      million.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On November
      21, 2006, pursuant to an agreement dated October 25, 2006 among AREH, NEG Oil
      &amp; Gas and National Energy Group, Inc., or NEGI, NEGI sold its membership
      interest in NEG Holding LLC to NEG Oil &amp; Gas for consideration of
      approximately $261.1 million paid in cash. Of that amount, $149.6 million was
      used to repay the principal of and accrued interest with respect to the NEGI
      10.75% senior notes due 2007, all of which were held by us.</div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 0pt"><strong><i>Real
      Estate</i></strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Operating
      properties are reclassified to held for sale when subject to a contract or
      letter of intent. The operations of such properties are classified as
      discontinued operations. The properties classified as discontinued operations
      have changed during fiscal 2007 and, accordingly, certain amounts in the
      statement of operations and cash flows for the three months ended March&#160;31,
      2007 and 2006 have been reclassified to conform to the current classification
      of
      properties. During the first quarter of 2007 two properties were reclassified
      to
      held for sale.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Results of Operations
      and Assets Held for Sale</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      financial position and results of our Oil and Gas and Real Estate operations
      and
      of our Atlantic City Gaming operations described above are presented as assets
      and liabilities of discontinued operations held for sale in the consolidated
      balance sheets and discontinued operations in the consolidated statements of
      operations, respectively, for all periods presented in accordance with SFAS
      No.
      144.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-66</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>Note 3 &#8212;
Discontinued Operations
      and Assets Held for Sale &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of the results of operations for our discontinued operations for the
      three months ended March&#160;31, 2007 and 2006 is as follows (in $000s)
      (unaudited):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="335">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="43">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="44">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="446">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="155" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended<br>March&#160;31,
                </strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="446">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="69">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="446">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="69" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="69">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Oil
                and Gas</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">108,292</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Atlantic
                City Gaming</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">40,773</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                Real Estate</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,238</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,718</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                revenues</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,238</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">150,783</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Operating
                income from discontinued operations:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Oil
                and Gas</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">64,988</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Atlantic
                City Gaming</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">732</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                Real Estate</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,079</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">962</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                operating income</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">1,079</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">66,682</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(270</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">(5,435</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                and other income</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">18,642</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,040</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                tax expense</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(2,981</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(3,446</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 5.75pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 10.3pt">Income
                from discontinued operations</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">16,470</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">58,841</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 5.75pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 10.3pt">Minority
                interest</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(1,794</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">54</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 5.75pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 10.3pt">Gain
                on sales of discontinued operations, net of income taxes</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">13,185</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">251</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">27,861</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">59,146</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Interest
      and other income for the three months ended March&#160;31, 2007 includes
      approximately $8.5 million relating to a real estate tax refund received by
      Atlantic Coast and approximately $10.1 million representing the net gain on
      the
      settlement of litigation relating to GB Holdings.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The gain
      on sales of discontinued operations in the three months ended March&#160;31,
      2007 includes approximately $3.9 million of gain on sales of real estate and
      $9.3 million relating to the working capital adjustment to the gain recorded
      on
      the sale of our Oil and Gas operations in November 2006.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Assets
      held for sale as of March&#160;31, 2007 and December 31, 2006 totaled $48.2
      million and $47.5 million, respectively. These relate to assets of WPI and
      Real
      Estate that are classified as held for sale in accordance with SFAS 144.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 4 &#8212; Related Party
      Transactions</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Administrative
      Services</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In July
      2005, we entered into a license agreement with an affiliate for the
      non-exclusive use of approximately 1,514 square feet of office space for which
      we pay monthly base rent of $13,000 plus 16.4% of certain &#8220;additional rent.&#8221; The
      license agreement expires in May 2012. Under the agreement, base rent is subject
      to increases in July 2008 and December 2011. Additionally, we are entitled
      to
      certain annual rent credits each December beginning December 2005 and continuing
      through December 2011. In each of the three months ended March&#160;31, 2007 and
      2006, we paid rent of approximately $40,000.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-67</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>Note 4 &#8212; Related
      Party Transactions &#8211; (continued)</strong></div>
    <div style="MARGIN: 0pt; TEXT-INDENT: 18pt">An affiliate occupies a portion
      of
      certain office space leased by us. Monthly payments from the affiliate for
      the
      use of the space began on October 12, 2006. For the three months ended
      March&#160;31, 2007, we received $19,000 for the use of such space.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In the
      three months ended March&#160;31, 2007 and 2006, we paid approximately $162,000
      and $214,500, respectively, to an affiliate for telecommunication
      services.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">An
      affiliate provided certain professional services to WPI for which WPI incurred
      charges of approximately $27,000 and $81,000 for the three months ended
      March&#160;31, 2007 and 2006, respectively.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      provided certain professional services to affiliates for which we charged
      $175,000 and $113,000 in the three months ended March&#160;31, 2007 and 2006,
      respectively. As of March&#160;31, 2007, current liabilities in the consolidated
      balance sheet included $116,164 to be applied to our charges to the affiliate
      for services to be provided to it.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 5 &#8212; Investments
      and Related Matters</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>a. Current
      Investments</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Current
      investments consist of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="195">
            </td>
            <td width="16">
            </td>
            <td width="9">
            </td>
            <td width="42">
            </td>
            <td width="16">
            </td>
            <td width="9">
            </td>
            <td width="42">
            </td>
            <td width="16">
            </td>
            <td width="9">
            </td>
            <td width="42">
            </td>
            <td width="16">
            </td>
            <td width="9">
            </td>
            <td width="42">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="260">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="5" valign="bottom" width="160" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,
                2007</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="5" valign="bottom" width="160" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,
                2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="260">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Amortized<br>Cost</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Carrying<br>Value</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="69">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Amortized<br>Cost</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Carrying<br>Value</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="260">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="5" valign="bottom" width="160">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                Investments:</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><i>Trading</i></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                investments</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">28,727</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">20,538</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                current trading</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">28,727</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">20,538</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><i>Available
                for Sale</i></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Marketable
                equity and debt securities</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">236,354</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">247,880</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">242,080</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">265,411</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                investments</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">284,535</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">286,945</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">251,131</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">253,166</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                current available for sale</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">520,889</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">534,825</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">493,211</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">518,577</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                current investments</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">520,889</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">563,552</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">493,211</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">539,115</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We use
      the services of an unaffiliated third-party investment manager to manage certain
      fixed income investments. As of March&#160;31, 2007 and December 31, 2006,
      $162.0 million and $163.7 million, respectively, had been invested at the
      discretion of such manager in a diversified portfolio consisting predominantly
      of short-term investment grade debt securities. Investments managed by the
      third-party investment manager are classified as available for sale securities
      in the above table.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-68</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>Note 5 &#8212;
Investments and
      Related Matters &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>b. Noncurrent
      Investments</i></strong></div>
    <div style="MARGIN-TOP: 10pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt"><strong>Investment
      in ImClone Systems Incorporated</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      described in Note 1 above, we adopted SFAS 159 as of January 1, 2007 and elected
      to apply the fair value option to our investment in ImClone at the time of
      adoption. Previously, we accounted for our investment in ImClone under the
      equity method in accordance with APB 18, <i>The Equity Method of Accounting for
      Investments in Common Stock.</i> The transition adjustment to beginning
      partners&#8217; equity related to the adoption of SFAS 159 was a charge of
      approximately $42.2 million. We recorded approximately $63.9 million of
      unrealized gains in the first quarter of fiscal 2007 resulting from the change
      in the market price of ImClone&#8217;s stock.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">At
      March&#160;31, 2007 and December 31, 2006, our carrying value of our equity
      investment in ImClone was $186.1 million based on the fair value method of
      accounting and $164.3 million based on the equity method of accounting,
      respectively. As of March&#160;31, 2007 and December 31, 2006, the market value
      of our ImClone shares held was $186.1 million and $122.2 million, respectively,
      which we believe is not material to our total assets. As of March&#160;31, 2007,
      the total shares of ImClone common stock held by us as a percentage of ImClone&#8217;s
      total outstanding shares was 5.4%. ImClone is a registered SEC filer and its
      consolidated financial statements are readily available at www.sec.gov.</div>
    <div style="MARGIN-TOP: 10pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt"><strong>Other
      Noncurrent Investments </strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      carrying value of other noncurrent investments was $13.7 million and $13.4
      million as of March&#160;31, 2007 and December 31, 2006, respectively. Included
      in other securities is an investment of 4.4% of the common stock of Philip
      Services Corporation, an entity controlled by related parties. The investment
      has a cost basis of $0.7 million, which is net of significant impairment charges
      taken in prior years.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 6 &#8212; Inventories,
      Net</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Inventories,
      net, relate solely to our Home Fashion segment and consist of the following
      (in
      $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="333">
            </td>
            <td width="16">
            </td>
            <td width="6">
            </td>
            <td width="43">
            </td>
            <td width="16">
            </td>
            <td width="6">
            </td>
            <td width="43">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="444">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td colspan="2" valign="bottom" width="67" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td colspan="2" valign="bottom" width="67" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="444">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td colspan="2" valign="bottom" width="67">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Raw
                materials and supplies</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">26,372</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">32,059</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goods
                in process</div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">77,481</div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">83,592</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Finished
                goods</div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">131,505</div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">129,851</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="444">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">235,358</div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">245,502</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 7 &#8212; Trade, Notes
      and Other Receivables, Net</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Trade
      notes and other receivables, net, consist of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="341">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="38">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="44">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="455">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="67" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="455">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="59">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="455">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Trade
                receivables&#160;&#8211; Home Fashion</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">142,827</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">134,111</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="455">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Allowance
                for doubtful accounts&#160;&#8211; Home Fashion</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">(8,136</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(8,303</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="455">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">35,150</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">50,688</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="455">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">169,841</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">176,496</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-69</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 8 &#8212; Other Current
      Assets</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Other
      current assets consist of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="354">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="14">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="472">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="472">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="472">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Restricted
                cash</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">33,090</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">87,428</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="472">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">43,299</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">47,559</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="472">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="472">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">76,389</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">134,987</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December 31, 2006, restricted cash included $50.0 million placed into escrow
      related to our sale of ACE to Pinnacle, which was released in February 2007
      in
      connection with the settlement of the litigation with GB Holdings. Additionally,
      restricted cash consists of balances for escrow deposits and funds held to
      collateralize letters of credit.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 9 &#8212; Property,
      Plant and Equipment</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Property,
      plant and equipment consists of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="333">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="44">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="46">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="444">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="67" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="444">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="67">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="61">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Land</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">115,236</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">129,729</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Buildings
                and improvements</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">443,402</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">446,878</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Machinery,
                equipment and furniture</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">332,614</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">333,741</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Assets
                leased to others</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">117,110</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">123,398</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Construction
                in progress</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">112,480</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">90,672</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="444">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,120,842</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,124,418</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                accumulated depreciation and amortization</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(222,248</div>
            </td>
            <td valign="bottom" width="18" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(217,347</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                property, plant and equipment</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">898,594</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="61" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">907,071</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Depreciation
      and amortization expense related to property, plant and equipment for the three
      months ended March&#160;31, 2007 and 2006 were $14.5 million and $17.4 million,
      respectively.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 10 &#8212; Other Non
      Current Assets</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Other
      non current assets consist of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="348">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="35">
            </td>
            <td width="13">
            </td>
            <td width="7">
            </td>
            <td width="42">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="464">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="67" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="464">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="464">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                taxes </div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">45,626</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">48,976</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="464">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">Deferred
                finance costs, net of accumulated amortization of $4,945 and<br>$4,827 as
                of March&#160;31, 2007 and December 31, 2006, respectively</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">10,325</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">11,684</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="464">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                </div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">25,363</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24,577</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="464">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">81,314</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">85,237</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-70</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 11 &#8212; Minority
      Interests</strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: 18pt">Minority
      interests consist of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="361">
            </td>
            <td width="5">
            </td>
            <td width="36">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="43">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="482">&#160;</td>
            <td colspan="2" valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="67" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="482">&#160;</td>
            <td colspan="2" valign="bottom" width="55">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="482">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">WPI</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">166,938</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">178,843</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="482">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Atlantic
                Coast</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">6,969</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">70,563</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="482">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">NEGI</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24,112</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">42,815</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="482">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt" align="right">198,019</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt" align="right">292,221</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      minority interest in Atlantic Coast was reduced primarily as a result of the
      settlement of the litigation relating to GB Holdings. As a result, our ownership
      in Atlantic Coast increased from 67.6% to 96.9%.</div>
    <div style="MARGIN-TOP: 9.15pt; MARGIN-BOTTOM: 0pt"><strong>Note 12 &#8212; Long-Term
      Debt</strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: 18pt">Long-term
      debt consists of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="333">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="45">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="46">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="444">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="67" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="70" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="444">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="67">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Senior
                unsecured 7.125%&#160;notes due 2013&#160;&#8211; AREP</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt" align="center">$</div>
            </td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">967,982</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">475,500</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Senior
                unsecured 8.125%&#160;notes due 2012&#160;&#8211; AREP</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">346,352</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">346,027</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Senior
                secured 7.85%&#160;notes due 2012&#160;&#8211; ACEP</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">215,000</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">215,000</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Borrowings
                under credit facility&#160;&#8211; ACEP</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">40,000</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">40,000</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Mortgages
                payable</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">108,027</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">109,289</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">12,470</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">13,425</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 3.35pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">Total
                long-term debt</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt" align="right">1,689,831</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt" align="right">1,199,241</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="444">
              <div style="MARGIN-TOP: 3.35pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">Less
                current portion</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt" align="right">(23,620</div>
            </td>
            <td valign="bottom" width="18" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt" align="right">(23,970</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="444">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="center">$</div>
            </td>
            <td valign="bottom" width="60" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,666,211</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="62" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,175,271</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 9.15pt; MARGIN-BOTTOM: 0pt"><strong><i>Senior unsecured
      7.125% notes due 2013</i></strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">On
      February 7, 2005, we issued $480.0 million aggregate principal amount of 7.125%
      senior unsecured notes due 2013, or the 7.125% notes, priced at 100% of
      principal amount. The 7.125% notes were issued pursuant to an indenture dated
      February 7, 2005 between us, as issuer, American Real Estate Finance Corp.,
      or
      AREF, as co-issuer, AREH, as guarantor, and Wilmington Trust Company, as trustee
      (referred to herein as the 2005 Indenture). Other than AREH, no other
      subsidiaries guarantee payment on the notes. AREF, our wholly owned subsidiary,
      was formed solely for the purpose of serving as a co-issuer of the 7.125%
      notes.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">On
      January 16, 2007, we issued an additional $500.0 million aggregate principal
      amount of 7.125% notes, or the additional 7.125% senior notes (the 7.125% notes
      and the additional 7.125% senior notes being referred to herein as the notes),
      priced at 98.4% of par, or at a discount of 1.6%, pursuant to the 2005
      Indenture. The notes have a fixed annual interest rate of 7.125%, which will
      be
      paid every six months on February 15 and August 15 and will mature on February
      15, 2013. At the time we issued the additional 7.125% senior notes, we entered
      into a new registration rights agreement in which we agreed to permit
      noteholders to exchange the notes for new notes which have been registered
      under
      the Securities Act of 1933, as amended, or the Securities Act.</div>
    <div style="MARGIN-TOP: 9.15pt; MARGIN-BOTTOM: 0pt"><strong><i>Senior unsecured
      8.125% notes due 2012</i></strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">On
      May 12, 2004, AREP and AREH co-issued senior unsecured 8.125% notes due 2012,
      or
      the 8.125% notes, in the aggregate principal amount of $353 million. The 8.125%
      notes were priced at 99.266% of principal amount and have a fixed annual
      interest rate of 8.125%, which will be paid every six months on June 1 and
      December 1, commencing December 1, 2004. The 8.125% notes will mature on June
      1,
      2012. AREH is a guarantor of the debt. No other subsidiaries guarantee payment
      on the notes.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-71</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 12 &#8212; Long-Term
      Debt &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Senior unsecured
      notes restrictions and covenants &#8212; AREP</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      indentures governing our senior unsecured notes restrict the payment of cash
      dividends or distributions, the purchase of equity interests or the purchase,
      redemption, defeasance or acquisition of debt subordinated to the senior
      unsecured notes. The indentures also restrict the incurrence of debt or the
      issuance of disqualified stock, as defined, with certain exceptions, provided
      that we may incur debt or issue disqualified stock if, immediately after such
      incurrence or issuance, the ratio of the aggregate principal amount of all
      outstanding indebtedness of AREP and its subsidiaries on a consolidated basis
      to
      the tangible net worth of AREP and its subsidiaries on a consolidated basis
      would be less than 1.75 to 1.0. As of March&#160;31, 2007, such ratio was less
      than 1.75 to 1.0.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      indentures governing our senior unsecured notes require that on each quarterly
      determination date we and the guarantor maintain a minimum ratio of cash flow
      to
      fixed charges, each as defined, of 1.5 to 1.0, for the four consecutive fiscal
      quarters most recently completed prior to such quarterly determination date.
      For
      the first fiscal quarter ended March&#160;31, 2007, the ratio of cash flow to
      fixed charges was greater than 1.5 to 1.0.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      indentures also require, on each quarterly determination date, that the ratio
      of
      total unencumbered assets, as defined, to the principal amount of unsecured
      indebtedness, as defined, be greater than 1.5 to 1.0 as of the last day of
      the
      most recently completed fiscal quarter. As of March&#160;31, 2007, such ratio
      was in excess of 1.5 to 1.0. Based on this ratio, as of March&#160;31, 2007, we
      and AREH could have incurred up to approximately $1.4 billion of additional
      indebtedness.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>AREP Senior Secured
      Revolving Credit Facility</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On August
      21, 2006, we and AREF, as the borrowers, and certain of our subsidiaries, as
      guarantors, entered into a credit agreement with Bear Stearns Corporate Lending
      Inc., as administrative agent, and certain other lender parties. Under the
      credit agreement, we are permitted to borrow up to $150.0 million, including
      a
      $50.0&#160;million sub-limit that may be used for letters of credit. Borrowings
      under the agreement, which are based on our credit rating, bear interest at
      LIBOR plus 1.0 % to 2.0 %. We pay an unused line fee of 0.25 % to 0.5 %. As
      of
      March&#160;31, 2007, there were no borrowings under the facility.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Obligations
      under the credit agreement are guaranteed by and secured by liens on
      substantially all of the assets of certain of our indirect wholly owned holding
      company subsidiaries. The credit agreement has a term of four years and all
      amounts are due and payable on August 21, 2010. The credit agreement includes
      covenants that, among other things, restrict the creation of liens and certain
      dispositions of property by holding company subsidiaries that are guarantors.
      Obligations under the credit agreement are immediately due and payable upon
      the
      occurrence of certain events of default.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Senior secured
      7.85% notes due 2012 &#8212; ACEP</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      indenture governing ACEP&#8217;s 7.85% senior secured notes due 2012 restrict the
      payment of cash dividends or distributions by ACEP, the purchase of its equity
      interests, the purchase, redemption, defeasance or acquisition of debt
      subordinated to ACEP&#8217;s notes and investments as &#8220;restricted payments.&#8221; The
      indenture also prohibits the incurrence of debt or the issuance of disqualified
      or preferred stock, as defined, by ACEP, with certain exceptions, provided
      that
      ACEP may incur debt or issue disqualified stock if, immediately after such
      incurrence or issuance, the ratio of consolidated cash flow to fixed charges
      (each as defined) for the most recently ended four full fiscal quarters for
      which internal financial statements are available immediately preceding the
      date
      on which such additional indebtedness is incurred or disqualified stock or
      preferred stock is issued would be at least 2.0 to 1.0, determined on a pro
      forma basis giving effect to the debt incurrence or issuance. As of
      March&#160;31, 2007, such ratio was in excess of 2.0 to 1.0. The indenture also
      restricts the creation of liens, the sale of assets, mergers, consolidations
      or
      sales of substantially all of ACEP&#8217;s assets, the lease or grant of a license,
      concession, other agreements to occupy, manage or use ACEP&#8217;s assets, the
      issuance of capital stock of restricted subsidiaries and certain related party
      transactions. The </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-72</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 12 &#8212; Long-Term
      Debt &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt">ACEP notes allow ACEP to incur
      indebtedness, among other things, of up to $50.0 million under credit
      facilities, non-recourse financing of up to $15.0 million to finance the
      construction, purchase or lease of personal or real property used in its
      business, permitted affiliate subordinated indebtedness (as defined), the
      issuance of additional 7.85% senior secured notes due 2012 in an aggregate
      principal amount not to exceed 2.0 times net cash proceeds received from equity
      offerings and permitted affiliate subordinated debt, and additional indebtedness
      of up to $10.0 million.</div>
    <div style="MARGIN-TOP: 9.15pt; MARGIN-BOTTOM: 0pt"><strong><i>ACEP Senior
      Secured Revolving Credit Facility</i></strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Effective
      May 11, 2006, ACEP, and certain of ACEP&#8217;s subsidiaries, as guarantors, entered
      into an amended and restated credit agreement with Wells Fargo Bank N.A., as
      syndication agent, Bear Stearns Corporate Lending Inc., as administrative agent,
      and certain other lender parties. As of March&#160;31, 2007, the interest rate
      on the outstanding borrowings under the credit facility was 6.82% per annum.
      The
      credit agreement amends and restates, and is on substantially the same terms
      as,
      a credit agreement entered into as of January 29, 2004. Under the amended and
      restated credit agreement, ACEP will be permitted to borrow up to $60.0 million.
      Obligations under the credit agreement are secured by liens on substantially
      all
      of the assets of ACEP and its subsidiaries. The credit agreement has a term
      of
      four years and all amounts are due and payable on May 10, 2010. As of
      March&#160;31, 2007, there were $40.0 million of borrowings under the credit
      agreement. The borrowings were incurred to finance a portion of the purchase
      price of the Aquarius.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The credit
      agreement includes covenants that, among other things, restrict the incurrence
      of additional indebtedness by ACEP and its subsidiaries, the issuance of
      disqualified or preferred stock, as defined, the creation of liens by ACEP
      or
      its subsidiaries, the sale of assets, mergers, consolidations or sales of
      substantially all of ACEP&#8217;s assets, the lease or grant of a license or
      concession, other agreements to occupy, manage or use ACEP&#8217;s assets, the
      issuance of capital stock of restricted subsidiaries and certain related party
      transactions. The credit agreement also requires that, as of the last date
      of
      each fiscal quarter, ACEP&#8217;s ratio of consolidated first lien debt to
      consolidated cash flow not be more than 1.0 to 1.0. As of March&#160;31, 2007,
      such ratio was less than 1.0 to 1.0. As of March&#160;31, 2007, ACEP was in
      compliance with each of the covenants.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      restrictions imposed by ACEP&#8217;s senior secured notes and the credit facility
      likely will limit our receiving payments from the operations of our hotel and
      gaming properties.</div>
    <div style="MARGIN-TOP: 9.15pt; MARGIN-BOTTOM: 0pt"><strong><i>Mortgages
      Payable</i></strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Mortgages
      payable, all of which are non-recourse to us, bear interest at rates between
      4.97% and 7.99% and have maturities between September 1, 2008 and July 1,
      2016.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>WestPoint Home
      Secured Revolving Credit Agreement</i></strong></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On June
      16,
      2006, WestPoint Home, Inc., an indirect wholly owned subsidiary of WPI, entered
      into a $250.0&#160;million loan and security agreement with Bank of America,
      N.A., as administrative agent and lender. On September 18, 2006, The CIT
      Group/Commercial Services, Inc., General Electric Capital Corporation and Wells
      Fargo Foothill, LLC were added as lenders under this credit agreement. Under
      the
      five-year agreement, borrowings are subject to a monthly borrowing base
      calculation and include a $75.0 million sub-limit that may be used for letters
      of credit. Borrowings under the agreement bear interest, at the election of
      WestPoint Home, either at the prime rate adjusted by an applicable margin
      ranging from minus 0.25% to plus 0.50% or LIBOR adjusted by an applicable margin
      ranging from plus 1.25% to 2.00%. WestPoint Home pays an unused line fee of
      0.25% to 0.275%. Obligations under the agreement are secured by WestPoint Home&#8217;s
      receivables, inventory and certain machinery and equipment.</div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      agreement contains covenants including, among others, restrictions on the
      incurrence of indebtedness, investments, redemption payments, distributions,
      acquisition of stock, securities or assets of any other entity and capital
      expenditures. However, WestPoint Home is not precluded from effecting any of
      these transactions if excess availability, after giving effect to such
      transaction, meets a minimum threshold.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-73</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 12 &#8212; Long-Term
      Debt &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      March&#160;31, 2007, there were no borrowings under the agreement, but there
      were outstanding letters of credit of approximately $26.6 million, the majority
      of which relate to trade obligations.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 13 &#8212; Other Income
      (Expense)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Unaudited
      Other Income (Expense), net, is comprised of the following (in $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="360">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="480">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="5" valign="bottom" width="120" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three&#160;Months&#160;Ended<br>March&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="480">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="480">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="480">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                realized gains on sales of marketable securities</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">5,177</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">33,431</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="480">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Unrealized
                gains on marketable securities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">72,126</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">15,478</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="480">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                realized losses on securities sold short</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(1,510</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(5,131</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="480">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Unrealized
                gains (losses) on securities sold short</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">3,617</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(25,476</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="480">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gain
                on sale of assets</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">3,612</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="480">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,759</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,007</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="480">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt" align="right">84,781</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt" align="right">21,309</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      recorded approximately $63.9 million of unrealized gains in the first quarter
      of
      fiscal 2007 resulting from the change in the market price of ImClone&#8217;s
      stock.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 14&#8212; Segment
      Reporting</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Through
      the second quarter of fiscal 2006, we maintained the following six reportable
      segments: (1) Oil and Gas; (2) Gaming; (3) Rental Real Estate; (4) Property
      Development; (5) Associated Resort Activities; and (6) Home Fashion. Our three
      real estate related operating and reportable segments are all individually
      immaterial and have been aggregated for purposes of the accompanying
      consolidated balance sheets and statements of operations.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      November 2006, we divested our Oil and Gas operating units. As a result, our
      Oil
      and Gas operations are now classified as discontinued operations and thus are
      not considered a reportable segment of our continuing operations. We now
      maintain the five remaining reportable segments.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We assess
      and measure segment operating results based on segment earnings from operations
      as disclosed below. Segment earnings from operations are not necessarily
      indicative of cash available to fund cash requirements nor synonymous with
      cash
      flow from operations. As discussed above, the terms of financings for the
      Gaming, Home Fashion and Associated Resorts Activities segments impose
      restrictions on their ability to transfer funds to us, including restrictions
      on
      dividends, distributions, loans and other transactions.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-74</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 14 &#8212; Segment
      Reporting &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      revenues and net segment operating income for each of the reportable segments
      of
      our continuing operations are summarized as follows for the three months ended
      March&#160;31, 2007 and 2006 (in $000s) (unaudited):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="303">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="116" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three&#160;Months&#160;Ended<br>March&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
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          <tr>
            <td valign="bottom" width="404">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming,
                net</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
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            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">112,888</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">85,945</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                Real Estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">3,517</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">3,246</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                development</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">18,145</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">11,384</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,225</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,082</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                Real Estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27,887</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">20,712</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">210,604</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">243,490</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                revenues</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">351,379</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">350,147</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                segment operating income (loss):</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">23,227</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">18,623</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rental
                Real Estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">2,024</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">2,248</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property
                development</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">2,533</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">1,408</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Resort
                operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(276</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(182</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                Real Estate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,281</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,474</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(39,015</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(37,958</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                segment operating loss</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(11,507</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(15,861</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Holding
                Company costs(i)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(7,668</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(11,145</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                operating loss</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(19,175</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(27,006</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(31,432</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(23,692</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">31,458</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">11,554</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                income (expense), net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">84,781</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">21,309</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in earnings of affiliate</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                from continuing operations before income taxes &amp; minority
                interest</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">65,632</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(17,811</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                tax expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(6,949</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(5,211</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">11,590</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">15,069</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="404">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                (loss) from continuing operations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">70,273</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(7,953</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 13pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">(i)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 2.5pt">Holding
      Company costs include general and administrative expenses and acquisition (legal
      and professional) costs at the Holding Company level. Selling, general and
      administrative expenses of the segments are included in their respective
      operating expenses in the accompanying statements of operations.</div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-75</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>Note 14 &#8212; Segment
      Reporting &#8211; (continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="340">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="43">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="45">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="454">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="65" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="68" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="454">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="65">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="68">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(restated)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="454">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Assets
                (in $000s):</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="454">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">560,646</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">552,753</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="454">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">386,833</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">382,220</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="454">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">778,912</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">806,000</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="454">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Subtotal</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">1,726,391</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">1,740,973</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="454">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Assets
                of discontinued operations held for sale</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">48,205</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">47,503</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="454">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Reconciling
                items(ii)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,855,543</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,463,167</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="454">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                assets</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,630,139</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,251,643</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 13pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">(ii)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 2.5pt">Reconciling
      items relate principally to cash and investments of the Holding Company.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 15 &#8212; Income
      Taxes</strong></div>
    <div style="MARGIN-TOP: 4.15pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: 18pt">Our
      corporate subsidiaries recorded the following income tax expense attributable
      to
      continuing operations for our taxable subsidiaries for the three months ended
      March&#160;31, 2007 and 2006 (in $000s) (unaudited):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="275">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="367">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="5" valign="top" width="113" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended
                <br>March&#160;31,</strong></div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="367">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="2" valign="top" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007</strong></div>
            </td>
            <td valign="top" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="367">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td colspan="2" valign="top" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="top" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="48">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="367">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current</div>
            </td>
            <td valign="top" width="13">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(6,587</div>
            </td>
            <td valign="top" width="17">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(5,595</div>
            </td>
            <td valign="top" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="367">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred</div>
            </td>
            <td valign="top" width="13">&#160;</td>
            <td valign="top" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(362</div>
            </td>
            <td valign="top" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">384</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="367">&#160;</td>
            <td valign="top" width="13">&#160;</td>
            <td valign="top" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(6,949</div>
            </td>
            <td valign="top" width="17" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(5,211</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 4.15pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      recorded income tax provisions of $6.9 million and $5.2 million on pre-tax
      income of $64.1 million for the three months ended March&#160;31, 2007 and
      pre-tax loss of ($19.3) million for the three months ended March&#160;31, 2006.
      Our effective income tax rate was 10.8% and (27.0)% for the respective periods.
      The difference between the effective tax rate and the statutory federal rate
      of
      35% is due principally to income or losses from partnership entities in which
      taxes are the responsibility of the partners, as well as changes in valuation
      allowances.</div>
    <div style="MARGIN-TOP: 4.15pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      adopted the provisions of Financial Accounting Standards Board (FASB)
      Interpretation No. 48, &#8220;Accounting for Uncertainty in Income Taxes&#8221; (FIN 48), on
      January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income
      taxes
      recognized in accordance with SFAS No. 109 , &#8220;Accounting for Income Taxes,&#8221; and
      prescribes a recognition threshold and measurement process for financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. The adoption of FIN 48 did not have a material impact
      on
      our consolidated financial statements.</div>
    <div style="MARGIN-TOP: 4.15pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      the
      date of adoption, our unrecognized tax benefits totaled $5.0 million, all of
      which, if recognized, would affect the annual effective tax rate. During the
      three months ended March&#160;31, 2007, there have been no changes to the amount
      of unrecognized tax benefits. We believe it is reasonably possible that the
      total amounts of unrecognized tax benefits could materially change as a result
      of settlements due to audits and the expiration of statutes of limitations
      prior
      to March&#160;31, 2008; however, quantification of an estimated amount cannot be
      made at this time.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      recognize interest accrued related to uncertain tax positions in interest
      expense. Penalties are recognized as a component of income tax expense. The
      amount of accrued interest and penalties on uncertain tax positions was $1.2
      million and $1.1 million as of March&#160;31, 2007 and January 1, 2007,
      respectively. The amount of interest and penalties accrued during the three
      months ended March&#160;31, 2007 was approximately $0.1 million.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-76</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 15 &#8212; Income Taxes
      (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">We
      or certain of our subsidiaries file income tax returns in the U.S. federal
      jurisdiction, various state jurisdictions, and various non-U.S. jurisdictions.
      We are no longer subject to U.S. federal, state, and non-U.S. income tax
      examinations for years prior to 2002.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 16 &#8212; Commitments
      and Contingencies</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We are
      from time to time parties to various legal proceedings arising out of our
      businesses. We believe, however, that other than the proceedings described
      below
      there are no proceedings pending or threatened against us which, if determined
      adversely, would have a material adverse effect on our business, financial
      condition, results of operations or liquidity</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>WPI
      Litigation</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In August
      2005, WPI acquired substantially all of the assets of WestPoint Stevens, Inc.
      pursuant to an order of the Bankruptcy Court, or the Sale Order. We were holders
      of approximately 39.99% of the outstanding first lien debt and approximately
      51.21% of the outstanding second lien debt of WestPoint Stevens, Inc. Since
      2005, we have been involved in litigation with certain of the first lien holders
      of WestPoint Stevens, Inc., or the Contrarian Group, in the Bankruptcy Court,
      the U.S. District Court for the Southern District of New York and, since 2006,
      in the Delaware Chancery Court, relating to the Sale Order and our ownership
      of
      a majority of the common stock of WPI. In late 2005, the District ruled on
      the
      Contrarian Group&#8217;s appeal of the Sale Order and remanded the matter to the
      Bankruptcy Court. On April 13, 2006, the Bankruptcy Court entered a remand
      order, or the Remand Order, which provides, among other things, that all of
      the
      shares of common stock and rights to acquire shares of common stock of WPI
      issued to us and the other first lien lenders or held in escrow pursuant to
      the
      Sale Order constituted &#8220;replacement collateral&#8221;, other than 5,250,000 shares of
      common stock that we acquired for cash. The Bankruptcy Court also issued a
      stay
      of the Remand Order pending the parties&#8217; appeal. Both parties appealed the
      Bankruptcy Court&#8217;s Remand Order to the District Court. In addition, the
      Contrarian Group requested that the stay be lifted or that we be required to
      post a bond as a condition to the continuance of the stay. On May 9, 2007,
      the
      District Court denied the Contrarian Group&#8217;s motion to lift the stay of the
      Remand Order, but conditioned the continuation of the stay on the posting of
      a
      bond of $200 million by May 17, 2007. The order is without prejudice to the
      right of any party to seek a change in the amount of the bond. We are currently
      reviewing the order. As of the date hereof, the District Court has not rendered
      a decision on the cross-appeals.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      January 19, 2007, the trustee for the first lien lenders, Beal Bank, and certain
      of the first lien lenders filed an Amended Complaint, captioned <i>Beal Bank,
      S.S.B. et al v. WestPoint International, Inc., et al.</i> Plaintiffs seek, among
      other relief, an order declaring that WPI is obliged to register the common
      stock (other than the 5,250,000 shares purchased by us) in Beal Bank&#8217;s name, an
      order declaring certain corporate governance changes implemented in 2005
      invalid, an order declaring invalid the actions taken at the December 20, 2006
      stockholders&#8217; meeting and an order to &#8220;unwind&#8221; the issuance to us in December
      2006 of the preferred stock of WPI, or, alternatively, directing that such
      preferred stock be held in trust. We have filed a motion to dismiss the Delaware
      action to which the Plaintiffs have objected. Oral argument is scheduled for
      May
      23, 2007. </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-77</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 16 &#8212; Commitments
      and Contingencies (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      currently own approximately 67.7% of the outstanding shares of common stock
      and
      100% of the preferred stock of WPI. As a result of the District Court&#8217;s order in
      the Bankruptcy case, the proceedings on remand, and the proceedings in the
      Delaware action, our percentage of the outstanding shares of common stock of
      WPI
      could be reduced to less than 50% and perhaps substantially less and our
      ownership of the preferred stock of WPI could also be affected. If we were
      to
      lose control of WPI, it could adversely affect the business and prospects of
      WPI
      and the value of our investment in it. In addition, we consolidated the balance
      sheet of WPI as of March 31, 2007 and WPI&#8217;s results of operations for the period
      from the date of acquisition through March 31, 2007. If we were to own less
      than
      50% of the outstanding common stock or the challenge to our preferred stock
      ownership is successful, we would have to evaluate whether we should consolidate
      WPI and if so our financial statements could be materially different than as
      presented as of March 31, 2007, December 31, 2006 and December 31, 2005 and
      for
      the periods then ended.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We cannot
      predict the outcome of these proceedings or the ultimate impact on our
      investment in WPI or the business prospects of WPI.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 17 &#8212; Fair Value
      of Financial Instruments</strong></div>
    <div style="MARGIN-TOP: 5.85pt; MARGIN-BOTTOM: 5pt; TEXT-INDENT: 18pt">The
      following table sets forth our financial instruments owned, at fair value,
      and
      financial instruments sold, but not yet purchased, at fair value (in
      $000s):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="336">
            </td>
            <td width="13">
            </td>
            <td width="7">
            </td>
            <td width="46">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="43">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="448">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="72" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="67" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="448">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="72">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Financial
                Instruments Owned:</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="72">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Trading
                investments</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">28,727</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">20,538</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Available
                for sale investments:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="62">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Marketable
                equity and debt securities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">247,880</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">265,411</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                securities</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="62">
              <div style="MARGIN: 0pt" align="right">286,945</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">253,166</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="448">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investment
                in ImClone Systems Incorporated</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">186,058</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">122,122</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="448">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="62" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">749,610</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">661,237</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="448">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt"><strong>Securities
                sold not yet purchased</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="62" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">8,682</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">25,398</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-78</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 17 &#8212; Fair Value
      of Financial Instruments (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      following table sets forth our financial assets and liabilities that were
      accounted for at fair value as of March&#160;31, 2007 by level within the fair
      value hierarchy. As required by SFAS 157, financial assets and liabilities
      are
      classified in their entirety based on the lowest level of input that is
      significant to the fair value measurement.</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="297">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="36">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="36">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="36">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="396">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="8" valign="bottom" width="208" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Assets
                and Liabilities at Fair Value<br>As of
                March&#160;31, 2007 ($000)</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="396">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Level
                1</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Level
                2</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Total</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="396">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="8" valign="bottom" width="208">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>Assets</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Trading
                investments(i)</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">28,727</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">28,727</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Available
                for sale investments:</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Marketable
                equity and debt securities(i)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">247,880</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">247,880</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                securities</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">23,500</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">(i)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">263,445</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">(ii)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">286,945</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investment
                in ImClone Systems Incorporated(i)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">186,058</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">186,058</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="396">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">486,165</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">263,445</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">749,610</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>Liabilities</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="396">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Securities
                sold not yet purchased(i)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">8,682</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">8,682</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 9pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt">(i)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 1.65pt; LINE-HEIGHT: 11pt">Based
      on quoted prices in active markets of the securities.</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -13pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 13pt">(ii)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 1.65pt; LINE-HEIGHT: 11pt">Includes
      $243.2 million representing 13,508,666 shares of SandRidge valued at $18.00
      per
      share based on an appraisal conducted in November 2006. As disclosed in Note
      18,
      on April 4, 2007, we sold all of our shares of SandRidge common stock to a
      consortium of investors for $18.00 per share.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 18 &#8212; Subsequent
      Events</strong></div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 0pt"><strong><i>Sale of Common
      Stock of SandRidge Energy, Inc.</i></strong></div>
    <div style="MARGIN-TOP: 5.85pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">On
      April 4, 2007, our subsidiaries signed agreements to sell their entire position
      in the common stock of SandRidge &#160;to a consortium of investors in a series
      of private transactions. The per share selling price was $18, and total cash
      consideration received at closing was approximately $243.2 million.</div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 0pt"><strong><i>Issuance of
      Convertible Debt</i></strong></div>
    <div style="MARGIN-TOP: 5.85pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">In
      April 2007, we sold an aggregate of $600.0 million of Variable Rate Senior
      Convertible Notes due 2013, or the Notes. The Notes were sold in a private
      placement pursuant to Section 4(2) of the Securities Act. The Notes bear
      interest at a rate of three month LIBOR minus 125 basis points, but no less
      than
      4.0% nor higher than 5.5%, and are convertible into depositary units of AREP
      at
      a conversion price of $132.595 per share, subject to adjustments in certain
      circumstances.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-79</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED PARTNERSHIP AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)<br>March&#160;31,
      2007</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note 18 &#8212; Subsequent
      Events &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The Notes
      have not been and will not be registered under the Securities Act and may not
      be
      offered or sold in the United States absent registration or an applicable
      exemption from the registration requirements of the Securities Act. In
      connection with the sale of the Notes, we and the buyers have entered into
      a
      registration rights agreement, pursuant to which we have agreed to file one
      or
      more shelf registration statements with respect to resales of depositary units
      issuable upon conversion of the Notes.</div>
    <div style="MARGIN-TOP: 9.15pt; MARGIN-BOTTOM: 0pt"><strong><i>Sale of American
      Casino &amp; Entertainment Properties LLC</i></strong></div>
    <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On April
      22, 2007, American Entertainment Properties Corp, or AEP, a wholly owned
      indirect subsidiary of AREP, entered into a Membership Interest Purchase
      Agreement with W2007/ACEP Holdings, LLC, an affiliate of Whitehall Street Real
      Estate Funds, a series of real estate investment funds affiliated with Goldman,
      Sachs &amp; Co., to sell all of the issued and outstanding membership interests
      of ACEP, which comprises our gaming operations, for $1.3 billion, plus or minus
      certain adjustments such as working capital, more fully described in the
      agreement. Pursuant to the terms of the agreement, AEP is required to cause
      ACEP
      to repay from funds provided by AEP, the principal, interest, prepayment penalty
      or premium due on ACEP&#8217;s 7.85% senior secured notes due 2012 and ACEP&#8217;s senior
      secured credit facility. With this transaction, we anticipate realizing a gain
      of approximately $0.8 billion on our investments in ACEP, before income taxes.
      ACEP&#8217;s casino assets are comprised of the Stratosphere Casino Hotel &amp; Tower,
      the Arizona Charlie&#8217;s Decatur, the Arizona Charlie&#8217;s Boulder and the Aquarius
      Casino Resort. The transaction is subject to the approval of the Nevada Gaming
      Commission and the Nevada State Gaming Control Board, as well as customary
      conditions. The parties expect to close the transaction in approximately eight
      months; however, we can not assure you that we will be able to consummate the
      transaction.</div>
    <div style="MARGIN-TOP: 9.15pt; MARGIN-BOTTOM: 0pt"><strong><i>Declaration
      of
      Distribution on Depositary Units</i></strong></div>
    <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On May
      4,
      2007, the Board of Directors approved a $0.05 increase in our quarterly
      distribution policy and payment of a quarterly cash distribution of $0.15 per
      unit on our depositary units payable in the second quarter of fiscal 2007.
      The
      distribution will be paid on June 1, 2007 to depositary unitholders of record
      at
      the close of business on May&#160;22, 2007. Under the terms of the indenture
      dated April&#160;5, 2007 governing our senior convertible notes due 2013, we
      will also be making a $0.05 distribution to holders of these notes in accordance
      with the formula set forth in the indenture.</div>
    <div style="MARGIN-TOP: 9.15pt; MARGIN-BOTTOM: 0pt"><strong><i>Potential
      Acquisitions</i></strong></div>
    <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      February 2007, we entered into an agreement and plan of merger pursuant to
      which
      we would acquire Lear Corporation, or Lear, for an aggregate purchase price
      of
      approximately $5.2 billion. In connection with the planned merger, our
      subsidiary, AREP Car Holdings Corp., entered into a commitment letter with
      Bank
      of America, N.A., and Banc of America Securities LLC on February 8, 2007,
      pursuant to which Bank of America would act as the initial lender under two
      senior secured credit facilities in an aggregate principal amount of $3.6
      billion, consisting of a $1.0 billion senior secured revolving facility and
      a
      $2.6 billion senior secured term loan B facility. The credit facilities, along
      with cash on hand, are intended to refinance and replace Lear&#8217;s existing credit
      facilities and to fund the transactions contemplated by the merger. We intend
      to
      fund approximately $1.4 billion of the purchase price from our cash and cash
      equivalents and investments.</div>
    <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Mr. Carl
      C. Icahn has proposed that we acquire his interests in American Railcar, Inc.,
      or ARI, and Philip Services Corporation. A committee of independent directors
      of
      the board has been formed to consider the proposals. No agreement has been
      reached as to price or terms. Any acquisition would be subject to, among other
      things, the negotiation, execution and closing of a definitive agreement and
      the
      receipt of a fairness opinion. We continuously identify, evaluate and engage
      in
      discussions concerning potential investments and acquisitions, including
      potential investments in and acquisitions of affiliates of Mr. Icahn. There
      cannot be any assurance that the current proposals or any other potential
      transactions that we consider will be completed. ARI is a publicly traded
      company that is primarily engaged in the business of manufacturing covered
      hoppers and tank railcars. Philip is an industrial services company that
      provides industrial outsourcing, environmental services and metal services
      to
      major industry sectors throughout North America.</div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-80</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 13.35pt; PAGE-BREAK-BEFORE: always" align="center">
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    to Index</strong></font></a></p>
<strong><a name="f81"></a>REPORT
  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">The Board of
      Directors<br>American Property Investors, Inc.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      audited the accompanying balance sheet of American Property Investors, Inc.
      as
      of December&#160;31, 2006. This financial statement is the responsibility of the
      Company&#8217;s management. Our responsibility is to express an opinion on this
      financial statement based on our audit.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      conducted our audit in accordance with the Standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the balance
      sheet is free of material misstatement. An audit includes examining, on a test
      basis, evidence supporting the amounts and disclosures in that balance sheet.
      An
      audit also includes assessing the accounting principles used and significant
      estimates made by management, as well as evaluating the overall balance sheet
      presentation. We believe that our audit of the balance sheet provides a
      reasonable basis for our opinion.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">In
      our
      opinion, the balance sheet referred to above presents fairly, in all material
      respects, the financial position of American Property Investors, Inc. as of
      December&#160;31, 2006, in conformity with accounting principles generally
      accepted in the United States of America.</div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt">/s/ Grant Thornton
      LLP</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">New York, New York<br>June
      15, 2007</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-81</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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    to Index</strong></font></a></p>
<strong><a name="f82"></a>AMERICAN
  PROPERTY INVESTORS, INC.</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>BALANCE
      SHEET</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="388">
            </td>
            <td width="14">
            </td>
            <td width="6">
            </td>
            <td width="58">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="517">&#160;</td>
            <td valign="top" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="86" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="517">&#160;</td>
            <td valign="top" width="19">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>ASSETS</strong></div>
            </td>
            <td valign="top" width="19">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">1,204,034 </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investment
                in partnerships (Note B)</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="78" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">52,342,623 </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="517">&#160;</td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="78" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">53,546,657 </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="517">&#160;</td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>LIABILITIES
                AND STOCKHOLDER&#8217;S
                EQUITY</strong></div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="517">&#160;</td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable and accrued expenses</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">6,059 </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="517">&#160;</td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Stockholder&#8217;s
                equity:</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Common
                stock &#8211; $1 par value, 1,216 shares authorized, <br>216 shares
                outstanding</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">216 </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Additional
                paid-in capital</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">35,507,904 </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Note
                receivable from affiliate (Note C)</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">(9,500,000)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Retained
                earnings</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="78">
              <div style="MARGIN: 0pt" align="right">26,938,478 </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accumulated
                other comprehensive
                income&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="78" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">594,000 </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                stockholder&#8217;s equity</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="78" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">53,540,598 </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="517">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                liabilities and stockholder's equity</div>
            </td>
            <td valign="top" width="19">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="78" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">53,546,657
</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt" align="center"><i>See notes
      to
      balance sheet.</i></div>
    <div style="MARGIN: 0pt" align="center">F-82</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

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    to Index</strong></font></a></p>
<strong><a name="f83"></a>AMERICAN
  PROPERTY INVESTORS, INC.</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO BALANCE SHEET<br>December&#160;31, 2006</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note A &#8212; Business and
      Summary of Significant Accounting Policies</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>1.
      Organization</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">American
      Property Investors, Inc. (&#8220;API&#8221; or &#8220;the Company&#8221;) is the general partner of both
      American Real Estate Partners, L.P. (&#8220;AREP&#8221;) and American Real Estate Holdings
      Limited Partnership (&#8220;AREH&#8221;). API has 1% general partnership interest in both
      AREP and AREH. API is a wholly-owned subsidiary of Becton Corporation (&#8220;Becton&#8221;)
      which in turn is owned by Carl C. Icahn. Mr.&#160;Icahn also owns, indirectly,
      approximately 90% of the limited partnership interests of AREP, a New York
      Stock
      Exchange master limited partnership.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>2. Cash and Cash
      Equivalents</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company considers all temporary cash investments with maturity at the date
      of
      purchase of three months or less to be cash equivalents.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>3. Use of
      Estimates</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Management
      of
      the Company has made certain estimates and assumptions relating to the reporting
      of assets and liabilities and the disclosure of contingent assets and
      liabilities at the date of the financial statement to prepare this balance
      sheet
      in conformity with accounting principles generally accepted in the United States
      of America. Actual results could differ from those estimates.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>4. Income
      Taxes</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company and its parent have elected and the stockholders have consented, under
      the applicable provisions of the Internal Revenue Code, to report their income
      for Federal income tax purposes as a Subchapter S Corporation. The stockholders
      report their respective shares of the net taxable income or loss on their
      personal tax returns. Accordingly, no liability has been accrued for current
      or
      deferred Federal income taxes related to the operations of the Company in the
      accompanying balance sheet. State and local taxes are de minimus</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>5. Investments
      in
      Partnerships</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company evaluates its investments in partially-owned entities in accordance
      with
      FASB Interpretation No. 46 (revised December&#160;2003), Consolidation of
      Variable Interest Entities, or FIN 46R. If the partially-owned entity is a
      &#8220;variable interest entity,&#8221; or a &#8220;VIE,&#8221; and that the Company is the &#8220;primary
      beneficiary&#8221; as defined in FIN 46R, the Company would account for such
      investment as if it were a consolidated subsidiary.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For a
      partnership investment which is not a VIE or in which the Company is not the
      primary beneficiary, the Company follows the accounting set forth in AICPA
      Statement of Position No. 78-9 &#8211; Accounting for Investments in Real Estate
      Ventures (SOP 78-9). In accordance with this pronouncement, investments in
      joint
      ventures are accounted for under the equity method when its ownership interest
      is less than 50% and it does not exercise direct or indirect control. Factors
      that are considered in determining whether or not the Company exercises control
      include important rights of partners in significant business decisions,
      including dispositions and acquisitions of assets, financing and operating
      and
      capital budgets, board and management representation and authority and other
      contractual rights of the partners. To the extent that the Company is deemed
      to
      control these entities, these entities would be consolidated.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company has determined that the AREP and AREH partnerships are not VIEs and
      therefore it accounts for these investments under the equity method of
      accounting as the limited partners have important rights as defined in SOP
      78-9.
      This investment was recorded initially at cost and was subsequently adjusted
      for
      equity in earnings or losses and cash contributions and distributions as well
      as
      other comprehensive income/loss.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-83</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      PROPERTY INVESTORS, INC.</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO BALANCE SHEET<br>December&#160;31, 2006</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note A &#8212; Business and
      Summary of Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On a
      periodic basis the Company evaluates whether there are any indicators that
      the
      value of its investments in partnerships are impaired. An investment is
      considered to be impaired if the Company&#8217;s estimate of the value of the
      investment is less than the carrying amount. The ultimate realization of the
      Company&#8217;s investments in partnerships is dependent on a number of factors
      including the performance of that entity and market conditions. If the Company
      determines that a decline in the value of a partnership is other than temporary,
      then the Company would record an impairment charge.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note B &#8212; Investment in
      Partnerships</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company has a 1% general partnership interest in both AREP and AREH. AREP is
      the
      99% limited partner and holding company of AREH which is involved in the
      following operating businesses: (i) Oil &amp; Gas; (ii) Gaming; (iii) Real
      Estate; and (iv) Home Fashion.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      carrying amount of the investment in partnerships on the Company&#8217;s balance sheet
      exceeds the underlying equity in the net assets of the partnerships by
      $254,382,000. This difference is as a result of adjustments reflected in AREP&#8217;s
      equity to account for certain acquisitions from affiliates of the general
      partner. The differences between the historical cost of companies acquired
      and
      the purchase price paid to the affiliates of the general partner were accounted
      for as contributions from or distributions to the general partner.</div>
<div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-84</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong>AMERICAN
      PROPERTY INVESTORS, INC.</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO BALANCE SHEET<br>December 31, 2006</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Summarized
      financial information for American Real Estate Partners, L.P. and subsidiaries
      as of December 31, 2006 is as follows (in thousands of dollars):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="316">
            </td>
            <td width="10">
            </td>
            <td width="5">
            </td>
            <td width="42">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="422">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td colspan="2" valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="422">&#160;</td>
            <td valign="bottom" width="13">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>ASSETS</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">1,912,235</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investments</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">539,115</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories,
                net</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">245,502</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Trade,
                notes and other receivables, net</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">176,496</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                current assets</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">134,987</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Assets
                held for sale</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">47,503</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current assets</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,055,838</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment, net</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gaming</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">422,715</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Real
                Estate</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">283,974</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Home
                Fashion</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">200,382</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                property, plant and
                equipment&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">907,071</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                investment and other</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">179,932</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intangible
                assets</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">25,916</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                assets</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">75,990</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                assets</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,244,747</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>LIABILITIES
                AND PARTNERS&#8217; EQUITY</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">69,853</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accrued
                expenses and other current liabilities</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">197,792</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                portion of long-term debt</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">23,970</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Securities
                sold not yet purchased</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">25,398</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Margin
                liability on marketable securities</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Liabilities
                of discontinued operations held for sale</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current liabilities</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">317,013</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">1,184,990</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                non-current liabilities</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">22,212</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Preferred
                limited partnership units</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">117,656</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">292,221</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Partners&#8217;
                equity</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,310,655</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="422">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                liabilities and partners&#8217; equity</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,244,747</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Note C &#8212; Note
      Receivable</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company has an unsecured demand note receivable due from Carl C. Icahn, in
      the
      amount of $9,500,000. Interest on the note accrues at the rate of 3.75% per
      annum and is payable on the last day of April and October. Interest has been
      paid through December&#160;31, 2006.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br></div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-85</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong><a name="f86"></a>REPORT
  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">To the Board of Directors
      and Shareholders of<br>Lear Corporation </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We have
      audited the accompanying consolidated balance sheets of Lear Corporation and
      Subsidiaries (the Company) as of December&#160;31, 2006 and 2005, and the
      related consolidated statements of operations, stockholders&#8217; equity and cash
      flows for each of the three years in the period ended December&#160;31, 2006.
      Our audits also included the financial statement schedule for the three years
      in
      the period ended December&#160;31, 2006, included in Item 8. These financial
      statements and schedule are the responsibility of the Company&#8217;s management. Our
      responsibility is to express an opinion on these financial statements and
      schedule based on our audits. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of the Company
      as
      of December&#160;31, 2006 and 2005, and the consolidated results of its
      operations and its cash flows for each of the three years in the period ended
      December&#160;31, 2006, in conformity with U.S. generally accepted accounting
      principles. Also, in our opinion, the related financial statement schedule
      for
      the three years in the period ended December&#160;31, 2006, when considered in
      relation to the basic financial statements taken as a whole, presents fairly,
      in
      all material respects, the information set forth therein. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      discussed in Note 2 to the consolidated financial statements, in 2006 the
      Company changed its method of accounting for stock-based compensation. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      discussed in Note 10 to the consolidated financial statements, in 2006 the
      Company changed its method of accounting for pension and other postretirement
      benefit plans. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">/s/ Ernst &amp; Young LLP
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">Detroit,
      Michigan<br>February&#160;20, 2007</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-86</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong><a name="f87"></a>LEAR
  CORPORATION AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>CONSOLIDATED
      BALANCE SHEETS</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="364">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="485">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="117" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="485">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="485">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="117">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions,<br>except share data)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>ASSETS</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Current
                Assets:</strong></div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">502.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">197.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                receivable </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">2,006.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">2,000.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories
                </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">581.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">595.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets of business held for sale </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">427.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">607.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">371.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">445.7</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,890.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,846.4</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Long-Term
                Assets:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,471.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">1,614.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill,
                net </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,996.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">1,939.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                assets of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">485.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">491.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">402.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                long-term assets </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,960.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,442.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7,850.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">$8,288.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="center"><strong>LIABILITIES
                AND STOCKHOLDERS&#8217;
EQUITY</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt"><strong>Current
                Liabilities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Short-term
                borrowings</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">39.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">23.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable and drafts </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">2,317.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">2,516.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accrued
                liabilities </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,099.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">1,008.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">405.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">549.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                portion of long-term debt </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">25.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9.4</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,887.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,106.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Long-Term
                Liabilities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">2,434.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">2,243.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                liabilities of business held for sale </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">48.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">27.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">878.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">800.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                long-term liabilities </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,361.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,070.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Stockholders&#8217;
                Equity:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Common
                stock, par value $0.01 per share, 150,000,000 shares
                authorized,<br>81,984,306 shares and 73,281,653 shares issued as of
                December&#160;31, 2006<br>and 2005, respectively </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">0.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">0.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Additional
                paid-in capital</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,338.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">1,108.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Common
                stock held in treasury, 5,732,316 shares and 6,094,847 shares as
                of<br>December&#160;31, 2006 and 2005, respectively, at
                cost&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(210.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(225.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Retained
                earnings (deficit)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(362.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">361.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accumulated
                other comprehensive loss</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(164.1</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(134.6</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="485">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                stockholders&#8217; equity</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">602.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,111.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="485">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7,850.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">8,288.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt; FONT-FAMILY: Times New (W1)" align="center"><font style="FONT-FAMILY: Times New (W1)"><i>The
      accompanying notes
      are an integral part of these consolidated financial
      statements.</i></font></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt" align="center"><font style="FONT-FAMILY: Times New Roman">F-87</font></div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<strong><a name="f88"></a>LEAR
  CORPORATION AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>CONSOLIDATED
      STATEMENTS OF OPERATIONS</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="307">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="409">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="193" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="409">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="409">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="193">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                million, except per share data)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                sales</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">17,838.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">17,089.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">16,960.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cost
                of sales </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">16,911.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">16,353.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">15,557.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Selling,
                general and administrative expenses</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">646.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">630.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">633.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill
                impairment charge</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">1,012.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                on divestiture of Interior business</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">636.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">209.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">183.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">165.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                expense, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">85.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                (loss) before provision for income taxes, minority interests<br>in
                consolidated subsidiaries, equity in net (income) loss of
                affiliates<br>and cumulative effect of a change in accounting
                principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(653.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(1,128.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">564.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Provision
                for income taxes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">54.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">194.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">128.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests in consolidated subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">18.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">7.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">16.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in net (income) loss of affiliates</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(16.2</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">51.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(2.6</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                (loss) before cumulative effect of a change in
                accounting<br>principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(710.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(1,381.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">422.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cumulative
                effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(707.5</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(1,381.5</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">422.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic
                net income (loss) per share: </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) before cumulative effect of a change in accounting
                principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(10.35</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(20.57</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">6.18</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cumulative
                effect of change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.04</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic
                net income (loss) per share </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(10.31</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(20.57</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">6.18</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted
                net income (loss) per share:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                (loss) before cumulative effect of a change in
                accounting<br>principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(10.35</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(20.57</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">5.77</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Cumulative
                effect of change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.04</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="409">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted
                net income (loss) per share</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(10.31</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(20.57</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">5.77</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt; FONT-FAMILY: Times New (W1)" align="center"><font style="FONT-FAMILY: Times New (W1)"><i>The
      accompanying notes
      are an integral part of these consolidated financial
      statements.</i></font></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt" align="center"><font style="FONT-FAMILY: Times New Roman">F-88</font></div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
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<strong><a name="f89"></a>LEAR
  CORPORATION AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS&#8217;
EQUITY</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="318">
            </td>
            <td width="12">
            </td>
            <td width="4">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="4">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="4">
            </td>
            <td width="30">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="424">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="178" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="424">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="424">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="178">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions, except share data)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt"><strong>Common
                Stock</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at beginning and end of period</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">0.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">0.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">0.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 2.25pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 11pt"><strong>Additional
                Paid-in Capital</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at beginning of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,108.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,064.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,027.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Net
                proceeds from the issuance of 8,695,653&#160;shares of common
                stock&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">199.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Stock-based
                compensation</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">30.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">43.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">26.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Cumulative
                effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(0.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Tax
                benefit of stock options exercised</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">0.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">10.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at end of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,338.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,108.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,064.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 2.25pt; PADDING-LEFT: 5.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 11pt"><strong>Treasury
                Stock</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at beginning of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(225.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(204.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(110.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">) </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Issuances
                of 362,531&#160;shares at an average price of $42.40</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">15.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Purchases
                of 490,900&#160;shares at an average price of $51.75</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(25.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Issuances
                of 126,529&#160;shares at an average price of $31.99</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">4.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Purchases
                of 1,834,300&#160;shares at an average price of $53.29</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(97.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">) </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Issuances
                of 395,126&#160;shares at an average price of $11.12 per share in
                settlement of<br>stock-based compensation</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">4.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at end of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(210.2</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(225.5</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(204.1</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">) </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 2.25pt; PADDING-LEFT: 5.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 11pt"><strong>Retained
                Earnings (Deficit)</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at beginning of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">361.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,810.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,441.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Net
                income (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(707.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(1,381.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">422.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Dividends
                declared of $0.25&#160;per share in 2006, $1.00&#160;per share in 2005 and
                $0.80&#160;per share in 2004</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(16.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(67.2</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(53.5</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">) </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at end of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(362.5</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">361.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">1,810.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 2.25pt; PADDING-LEFT: 5.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 11pt"><strong>Accumulated
                Other Comprehensive Income (Loss)</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Defined
                Benefit Plans</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at beginning of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(115.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(72.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(62.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">) </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Defined
                benefit plan adjustments</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">17.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(42.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(10.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">) </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Adoption
                of SFAS&#160;No.&#160;158</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(166.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at end of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(264.2</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(115.0</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(72.6</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">) </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Derivative
                Instruments and Hedging Activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at beginning of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">9.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">17.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(13.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">) </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Derivative
                instruments and hedging activities adjustments</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">5.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(8.4</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">31.1</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at end of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">14.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">9.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">17.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Cumulative
                Translation Adjustments</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at beginning of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(86.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">65.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(61.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">) </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Cumulative
                translation adjustments</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">90.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(152.4</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">127.1</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at end of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">3.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(86.8</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">65.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Deferred
                Income Tax Asset</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at beginning of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">58.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">48.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">35.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Deferred
                income tax asset adjustments</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">23.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">10.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">12.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Balance
                at end of period</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">81.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">58.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">48.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Accumulated
                other comprehensive income (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(164.1</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(134.6</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">58.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 2.25pt; PADDING-LEFT: 5.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 11pt"><strong>Total
                Stockholders&#8217; Equity</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">602.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">1,111.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">2,730.1</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 2.25pt; PADDING-LEFT: 5.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 11pt"><strong>Comprehensive
                Income (Loss)</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Net
                income (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(707.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(1,381.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">422.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Defined
                benefit plan adjustments</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">17.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(42.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(10.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">) </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Derivative
                instruments and hedging activities adjustments</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">5.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(8.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">31.1</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Cumulative
                translation adjustments</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">90.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">(152.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">127.1</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.5pt; PADDING-LEFT: 6pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 9.5pt">Deferred
                income tax asset adjustments</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">23.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">10.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt" align="right">12.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="FONT-SIZE: 9pt; MARGIN: 0pt; LINE-HEIGHT: 11pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 2.25pt; PADDING-LEFT: 5.75pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -5.75pt; LINE-HEIGHT: 11pt"><strong>Comprehensive
                Income (Loss)</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">(570.4</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">(1,574.7</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt" align="right">582.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 2.25pt; FONT-SIZE: 9pt; MARGIN-BOTTOM: 0pt">&#160;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10.65pt; MARGIN-BOTTOM: 5.35pt" align="center"><br><br></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt; FONT-FAMILY: Times New (W1)" align="center"><font style="FONT-FAMILY: Times New (W1)"><i>The
      accompanying notes
      are an integral part of these consolidated financial
      statements.</i></font></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt" align="center"><font style="FONT-FAMILY: Times New Roman">F-89</font></div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt; PAGE-BREAK-BEFORE: always" align="center">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>

<div style="MARGIN: 0pt" align="center"><strong><a name="f90"></a>LEAR CORPORATION
  AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>CONSOLIDATED
      STATEMENTS OF CASH FLOWS</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="312">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="26">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="416">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="186" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="416">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="416">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="186">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Operating Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income (loss)</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(707.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(1,381.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt" align="center">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">422.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Adjustments
                to reconcile net income (loss) to net cash provided by operating
                activities&#160;&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cumulative
                effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(2.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill
                impairment charges</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">1,012.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                on divestiture of Interior business</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">636.0</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Fixed
                asset impairment charges</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">15.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">97.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">3.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                tax provision (benefit)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(55.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">44.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">8.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in net (income) loss of affiliates</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(16.2</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">51.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(2.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">392.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">393.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">355.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                change in recoverable customer engineering and tooling</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">194.9</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(112.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(32.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                change in working capital items</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(110.1</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">9.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(62.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                change in sold accounts receivable</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(178.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">411.1</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(70.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">113.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">34.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">54.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash provided by operating activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">285.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">560.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">675.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Investing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Additions
                to property, plant and equipment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(347.6</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(568.4</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(429.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cost
                of acquisitions, net of cash acquired</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(30.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(11.8</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(103.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds from disposition of businesses and other assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">65.9</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">33.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">56.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash used in investing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(312.2</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(541.6</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(472.5</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Financing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Issuance
                of senior notes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">900.0</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">399.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Repayment
                of senior notes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(1,356.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(600.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Primary
                credit facility borrowings, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">597.0</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">400.0</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                long-term debt repayments, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(36.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(32.7</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(49.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Short-term
                debt repayments, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(11.8</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(23.8</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(29.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds from the sale of common stock</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">199.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Dividends
                paid</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(16.8</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(67.2</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(68.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from exercise of stock options</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">0.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">4.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">24.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Repurchase
                of common stock</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(25.4</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(97.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Increase
                (decrease) in drafts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">3.0</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(3.3</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(12.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash provided by (used in) financing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">277.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(347.0</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">166.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Effect
                of foreign currency translation</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">54.9</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(59.8</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">46.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                Change in Cash and Cash Equivalents</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">305.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(387.6</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">415.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents at Beginning of Year</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">197.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">584.9</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">169.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents at End of Year</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">502.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">197.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="center">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">584.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Changes
                in Working Capital:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                receivable</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">153.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(250.3</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt" align="center">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(147.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">29.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(76.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(7.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(358.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">298.1</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">189.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accrued
                liabilities and other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">66.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(97.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                change in working capital items</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(110.1</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">9.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="center">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(62.4</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Supplementary
                Disclosure:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="416">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                paid for interest</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">218.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">172.6</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="center">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">153.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="416">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">Cash
                paid
                for income taxes, net of refunds received of $30.7 in 2006,<br>$76.7 in
                2005 and $52.7 in 2004</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">84.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">112.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="center">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">140.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 2.65pt; MARGIN-BOTTOM: 0pt" align="center"><br><br><br><br><br><br><br><br><br></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt; FONT-FAMILY: Times New (W1)" align="center"><font style="FONT-FAMILY: Times New (W1)"><i>The
      accompanying notes
      are an integral part of these consolidated financial
      statements.</i></font></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 5pt" align="center"><font style="FONT-FAMILY: Times New Roman">F-90</font></div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt"><p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
<div style="MARGIN: 0pt" align="center"><strong><a name="f91"></a>LEAR CORPORATION
  AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(1) Basis of
      Presentation</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      consolidated financial statements include the accounts of Lear Corporation
      (&#8220;Lear&#8221; or the &#8220;Parent&#8221;), a Delaware corporation and the wholly owned and less
      than wholly owned subsidiaries controlled by Lear (collectively, the &#8220;Company&#8221;).
      In addition, Lear consolidates variable interest entities in which it bears
      a
      majority of the risk of the entities&#8217; potential losses or stands to gain from a
      majority of the entities&#8217; expected returns. Investments in affiliates in which
      Lear does not have control, but does have the ability to exercise significant
      influence over operating and financial policies, are accounted for under the
      equity method (Note 6, &#8220;Investments in Affiliates and Other Related Party
      Transactions&#8221;). </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company and its affiliates design and manufacture complete automotive seat
      systems, electrical distribution systems and various electronic products. The
      Company also supplies automotive interior systems and components, including
      instrument panels and cockpit systems, headliners and overhead systems, door
      panels and flooring and acoustic systems. The Company&#8217;s main customers are
      automotive original equipment manufacturers. The Company operates facilities
      worldwide (Note 13, &#8220;Segment Reporting&#8221;). </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(2) Summary of
      Significant Accounting Policies</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Assets and
      Liabilities of Business Held for Sale </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      accordance with Statement of Financial Accounting Standards (&#8220;SFAS&#8221;) No. 144,
&#8220;Accounting for the Impairment or Disposal of Long-Lived Assets,&#8221; the Company
      classifies the assets and liabilities of a business as held for sale when
      management approves and commits to a formal plan of sale and it is probable
      that
      the sale will be completed. The carrying value of the net assets of the business
      held for sale are then recorded at the lower of their carrying value or fair
      market value, less costs to sell. As of December&#160;31, 2006, the assets and
      liabilities of the Company&#8217;s North American interior business are classified as
      held for sale and all prior period balance sheet information has been restated
      (Note 3, &#8220;Divestiture of Interior Business&#8221;). </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Cash and Cash
      Equivalents </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Cash
      and
      cash equivalents include all highly liquid investments with original maturities
      of ninety days or less. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Accounts Receivable
      </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company records accounts receivable as its products are shipped to its
      customers. The Company&#8217;s customers are the major automotive manufacturers in the
      world. The Company records accounts receivable reserves for known collectibility
      issues, as such issues relate to specific transactions or customer balances.
      As
      of December&#160;31, 2006 and 2005, accounts receivable are reflected net of
      reserves of $14.9&#160;million and $20.4&#160;million, respectively. The Company
      writes off accounts receivable when it becomes apparent based upon age or
      customer circumstances that such amounts will not be collected. Generally,
      the
      Company does not require collateral for its accounts receivable. </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-91</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(2) Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Inventories
</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Inventories
      are stated at the lower of cost or market. Cost is determined using the
      first-in, first-out method. Finished goods and work-in-process inventories
      include material, labor and manufacturing overhead costs. The Company records
      inventory reserves for inventory in excess of production and/or forecasted
      requirements and for obsolete inventory in production and service inventories.
      As of December&#160;31, 2006 and 2005, inventories are reflected net of reserves
      of $87.1&#160;million and $85.7&#160;million, respectively. A summary of
      inventories is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="385">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="23">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="24">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="513">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="94" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="513">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="513">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="31" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="513">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Raw
                materials&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">439.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">449.2</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="513">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Work-in-process</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">35.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">36.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="513">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Finished
                goods</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="31" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">106.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">109.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="513">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">581.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">595.6</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Pre-Production
      Costs Related to Long-Term Supply Arrangements </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company incurs pre-production engineering, research and development (&#8220;ER&amp;D&#8221;)
      and tooling costs related to the products produced for its customers under
      long-term supply agreements. The Company expenses all pre-production ER&amp;D
      costs for which reimbursement is not contractually guaranteed by the customer.
      In addition, the Company expenses all pre-production tooling costs related
      to
      customer-owned tools for which reimbursement is not contractually guaranteed
      by
      the customer or for which the customer has not provided a non-cancelable right
      to use the tooling. During 2006 and 2005, the Company capitalized
      $122.0&#160;million and $227.2&#160;million, respectively, of pre-production
      ER&amp;D costs for which reimbursement is contractually guaranteed by the
      customer. During 2006 and 2005, the Company also capitalized $449.0&#160;million
      and $638.6&#160;million, respectively, of pre-production tooling costs related
      to customer-owned tools for which reimbursement is contractually guaranteed
      by
      the customer or for which the customer has provided a non-cancelable right
      to
      use the tooling. These amounts are included in other current and other long-term
      assets in the consolidated balance sheets. During 2006 and 2005, the Company
      collected $765.0&#160;million and $715.8&#160;million, respectively, of cash
      related to ER&amp;D and tooling costs. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">During
      2006 and 2005, the Company capitalized $17.4&#160;million and
      $44.4&#160;million, respectively, of Company-owned tooling. These amounts are
      included in property, plant and equipment, net, in the consolidated balance
      sheets. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      classification of capitalized pre-production ER&amp;D and tooling costs related
      to long-term supply agreements is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="386">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="23">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="23">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="514">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="92" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="514">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="37">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="514">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="514">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">87.7</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">160.4</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="514">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">116.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">146.9</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="514">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Recoverable
                customer engineering and
                tooling&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">203.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">307.3</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Gains
      and
      losses related to ER&amp;D and tooling projects are reviewed on an aggregate
      program basis. Net gains on projects are deferred and recognized over the life
      of the related long-term supply agreement. Net losses on projects are recognized
      as costs are incurred. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-92</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(2) Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Property, Plant
      and
      Equipment</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Property,
      plant and equipment is stated at cost. Depreciable property is depreciated over
      the estimated useful lives of the assets, using principally the straight-line
      method as follows: </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="393">
            </td>
            <td width="13">
            </td>
            <td width="60">
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="525">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Buildings
                and
                improvements&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="81">
              <div style="MARGIN: 0pt" align="right">20 to 40 years</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="525">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Machinery
                and equipment</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="81">
              <div style="MARGIN: 0pt" align="right">5 to 15
                years</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of property, plant and equipment is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="357">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="476">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="119" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="476">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="51">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="476">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="476">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Land&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">131.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">131.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="476">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Buildings
                and improvements</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">516.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">572.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="476">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Machinery
                and equipment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">2,077.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">2,116.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="476">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Construction
                in progress</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">60.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">56.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="476">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                property, plant and equipment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">2,785.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">2,876.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="476">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less&#160;&#8212;
                accumulated depreciation</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,314.2</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,261.7</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="476">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                property, plant and equipment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,471.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,614.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Depreciation
      expense was $387.0&#160;million, $388.5&#160;million and $350.6&#160;million for
      the years ended December&#160;31, 2006, 2005 and 2004, respectively. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Costs
      associated with the repair and maintenance of the Company&#8217;s property, plant and
      equipment are expensed as incurred. Costs associated with improvements which
      extend the life, increase the capacity or improve the efficiency or safety
      of
      the Company&#8217;s property, plant and equipment are capitalized and depreciated over
      the remaining life of the related asset. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Impairment of
      Goodwill</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Goodwill
      is not amortized but is tested for impairment on at least an annual basis.
      Impairment testing is required more often than annually if an event or
      circumstance indicates that an impairment, or decline in value, may have
      occurred. In conducting its impairment testing, the Company compares the fair
      value of each of its reporting units to the related net book value. If the
      fair
      value of a reporting unit exceeds its net book value, goodwill is considered
      not
      to be impaired. If the net book value of a reporting unit exceeds its fair
      value, an impairment loss is measured and recognized. The Company conducts
      its
      annual impairment testing on the first day of the fourth quarter each year.
      </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company utilizes an income approach to estimate the fair value of each of its
      reporting units. The income approach is based on projected debt-free cash flow
      which is discounted to the present value using discount factors that consider
      the timing and risk of cash flows. The Company believes that this approach
      is
      appropriate because it provides a fair value estimate based upon the reporting
      unit&#8217;s expected long-term operating cash flow performance. This approach also
      mitigates the impact of cyclical trends that occur in the industry. Fair value
      is estimated using recent automotive industry and specific platform production
      volume projections, which are based on both third-party and internally-developed
      forecasts, as well as commercial, wage and benefit, inflation and discount
      rate
      assumptions. Other significant assumptions include terminal value growth rates,
      terminal value margin rates, future capital expenditures and changes in future
      working capital requirements. While there are inherent uncertainties related
      to
      the assumptions used and to management&#8217;s application of these assumptions to
      this analysis, the Company believes that the income approach provides a
      reasonable estimate of the fair value of its reporting units. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-93</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(2) Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company&#8217;s 2006 annual goodwill impairment analysis, completed as of
      October&#160;1, resulted in no impairment. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">During
      the third and fourth quarters of 2005, events occurred which indicated a
      significant decline in the fair value of the Company&#8217;s interior segment, as well
      as an impairment of the related goodwill. These events included unfavorable
      operating results, primarily as a result of higher raw material costs, lower
      production volumes on key platforms, industry overcapacity, insufficient
      customer pricing and changes in certain customers&#8217; sourcing strategies, as well
      as the Company&#8217;s decision to evaluate strategic alternatives with respect to
      this segment. The Company evaluated the net book value of goodwill within its
      interior segment by comparing the fair value of the reporting unit to the
      related net book value. As a result, the Company recorded total goodwill
      impairment charges of $1.0&#160;billion in 2005 related to the interior segment.
      The Company also recognized a $2.9&#160;million goodwill impairment charge
      related to this segment during the second quarter of 2006. The goodwill resulted
      from a $19.0&#160;million purchase price adjustment for an indemnification claim
      related to the Company&#8217;s acquisition of UT Automotive, Inc. (&#8220;UT Automotive&#8221;)
      from United Technologies Corporation (&#8220;UTC&#8221;) in May&#160;1999. The purchase
      price adjustment was allocated to the Company&#8217;s electronic and electrical and
      interior segments (Note 12, &#8220;Commitments and Contingencies&#8221;). </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of the changes in the carrying amount of goodwill, by reportable
      operating segment, for each of the two years in the period ended
      December&#160;31, 2006, is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="252">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="9">
            </td>
            <td width="40">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="337">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Seating</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Electronic
                and<br>Electrical</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Interior</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Total</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="337">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="337">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of January&#160;1,
                2005&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,075.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="12">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">945.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">1,017.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">3,039.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="337">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill
                impairment charges</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(1,012.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(1,012.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="337">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                currency translation and other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(41.5</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="12" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(40.3</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(5.0</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(86.8</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="337">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of December&#160;31, 2005</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,034.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="12" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">905.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,939.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="337">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Purchase
                price adjustment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">16.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">19.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="337">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill
                impairment charges</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(2.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(2.9</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="337">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                currency translation and other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">26.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="12" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">14.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">40.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="337">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of December&#160;31, 2006</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,060.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="12" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">936.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,996.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Intangible
      Assets</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      Company&#8217;s intangible assets acquired through business acquisitions are valued
      based on independent appraisals. A summary of intangible assets as of
      December&#160;31, 2006 and 2005, is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="247">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="25">
            </td>
            <td width="12">
            </td>
            <td width="8">
            </td>
            <td width="39">
            </td>
            <td width="16">
            </td>
            <td width="10">
            </td>
            <td width="38">
            </td>
            <td width="12">
            </td>
            <td width="37">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="329">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Gross<br>Carrying<br>Value</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Accumulated<br>Amortization</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Net<br>Carrying<br>Value</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Weighted<br>Average<br>Useful
                Life<br>(Years)</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="329">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="33">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="329">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Technology&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">2.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(0.8</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">2.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">10.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="329">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Customer
                contracts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">23.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(8.4</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">14.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">7.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="329">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Customer
                relationships</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="33" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">29.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(4.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">25.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">19.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="329">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of December&#160;31, 2006</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">55.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="11" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(13.7</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="13" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">41.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">14.7</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 5.35pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-94</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(2) Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="260">
            </td>
            <td width="13">
            </td>
            <td width="7">
            </td>
            <td width="25">
            </td>
            <td width="13">
            </td>
            <td width="11">
            </td>
            <td width="36">
            </td>
            <td width="16">
            </td>
            <td width="7">
            </td>
            <td width="25">
            </td>
            <td width="13">
            </td>
            <td width="38">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="347">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Gross<br>Carrying<br>Value</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Accumulated<br>Amortization</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Net<br>Carrying<br>Value</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Weighted<br>Average<br>Useful
                Life<br>(Years)</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="347">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="15">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="347">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Technology&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">2.8</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="15">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">(0.4</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">2.4</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">10.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="347">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Customer
                contracts</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">20.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="15">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">(4.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">15.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">7.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="347">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Customer
                relationships</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="15" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(2.4</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">18.8</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="347">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of December&#160;31, 2005</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">50.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="15" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(7.7</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">43.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">14.2</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Excluding
      the impact of any future acquisitions, the Company&#8217;s estimated annual
      amortization expense is approximately $5.0&#160;million in each of the three
      succeeding years, decreasing to approximately $4.5 and $4.0&#160;million in the
      two years thereafter. </div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 0pt"><strong><i>Impairment
      of
      Long-Lived Assets</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Company monitors its long-lived assets for impairment indicators on an ongoing
      basis in accordance with SFAS No. 144, &#8220;Accounting for the Impairment or
      Disposal of Long-Lived Assets.&#8221; If impairment indicators exist, the Company
      performs the required analysis and records impairment charges in accordance
      with
      SFAS No. 144. In conducting its analysis, the Company compares the undiscounted
      cash flows expected to be generated from the long-lived assets to the related
      net book values. If the undiscounted cash flows exceed the net book value,
      the
      long-lived assets are considered not to be impaired. If the net book value
      exceeds the undiscounted cash flows, an impairment loss is measured and
      recognized. An impairment loss is measured as the difference between the net
      book value and the fair value of the long-lived assets. Fair value is estimated
      based upon either discounted cash flow analyses or estimated salvage values.
      Cash flows are estimated using internal budgets based on recent sales data,
      independent automotive production volume estimates and customer commitments,
      as
      well as assumptions related to discount rates. Changes in economic or operating
      conditions impacting these estimates and assumptions could result in the
      impairment of long-lived assets. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Company recorded fixed asset impairment charges related to certain operating
      locations within its interior segment of $10.0&#160;million and
      $82.3&#160;million in the years ended December&#160;31, 2006 and 2005,
      respectively. The remaining fixed assets of the Company&#8217;s North American
      interior business were written down to zero in the fourth quarter of 2006 as
      a
      result of entering into the agreement relating to the divestiture of the North
      American interior business (Note 3, &#8220;Divestiture of Interior Business&#8221;). </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">In
      the years ended December&#160;31, 2006 and 2005, the Company also recognized
      fixed asset impairment charges of $5.8&#160;million and $15.1&#160;million,
      respectively, in conjunction with its restructuring actions. In the year ended
      December&#160;31, 2004, the Company recognized fixed asset impairment charges of
      $3.0&#160;million related to certain facility consolidations. See Note 5,
&#8220;Restructuring.&#8221; The Company has certain other facilities that have generated
      operating losses in recent years. The results of the related impairment analyses
      indicated that impairment of the fixed assets was not required. However, the
      Company will continue to monitor the operating plans of these facilities for
      potential impairment. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">These
      fixed asset impairment charges are recorded in cost of sales in the consolidated
      statements of operations for the years ended December&#160;31, 2006, 2005 and
      2004. </div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 0pt"><strong><i>Revenue
      Recognition and Sales Commitments</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Company enters into agreements with its customers to produce products at the
      beginning of a vehicle&#8217;s life. Although such agreements do not provide for
      minimum quantities, once the Company enters into such agreements, the Company
      is
      generally required to fulfill its customers&#8217; purchasing requirements for the
      entire production life of the vehicle. These agreements generally may be
      terminated by the customer at any time. Historically, terminations of these
      agreements have been minimal. In certain instances, the Company may be committed
      under existing agreements to supply products to its customers at selling prices
      which are not sufficient to cover the direct cost to produce such products.
      In
      such situations, the Company recognizes losses as they are incurred. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-95</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(2) Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Company receives blanket purchase orders from its customers on an annual basis.
      Generally, each purchase order provides the annual terms, including pricing,
      related to a particular vehicle model. Purchase orders do not specify
      quantities. The Company recognizes revenue based on the pricing terms included
      in its annual purchase orders as its products are shipped to its customers.
      The
      Company is asked to provide its customers with annual cost reductions as part
      of
      certain agreements. The Company accrues for such amounts as a reduction of
      revenue as its products are shipped to its customers. In addition, the Company
      has ongoing adjustments to its pricing arrangements with its customers based
      on
      the related content, the cost of its products and other commercial factors.
      Such
      pricing accruals are adjusted as they are settled with the Company&#8217;s customers.
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Amounts
      billed to customers related to shipping and handling costs are included in
      net
      sales in the consolidated statements of operations. Shipping and handling costs
      are included in cost of sales in the consolidated statements of operations.
      </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Cost of Sales
      and
      Selling, General and Administrative Expenses</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Cost
      of sales includes material, labor and overhead costs associated with the
      manufacture and distribution of the Company&#8217;s products. Distribution costs
      include inbound freight costs, purchasing and receiving costs, inspection costs,
      warehousing costs and other costs of the Company&#8217;s distribution network.
      Selling, general and administrative expenses include selling, research and
      development and administrative costs not directly associated with the
      manufacture and distribution of the Company&#8217;s products. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Research and
      Development</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Costs
      incurred in connection with the development of new products and manufacturing
      methods, to the extent not recoverable from the Company&#8217;s customers, are charged
      to selling, general and administrative expenses as incurred. These costs
      amounted to $169.8&#160;million, $174.0&#160;million and $197.6&#160;million for
      the years ended December&#160;31, 2006, 2005 and 2004, respectively. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Other Expense,
      Net</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Other
      expense includes state and local non-income related taxes, foreign exchange
      gains and losses, discounts and expenses associated with the Company&#8217;s
      asset-based securitization and factoring facilities, losses on the
      extinguishment of debt (see Note 8, &#8220;Long-Term Debt&#8221;), gains and losses on the
      sales of fixed assets and other miscellaneous income and expense. A summary
      of
      other expense is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="335">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="20">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="20">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="446">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="8" valign="bottom" width="158" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended December 31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="446">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="49">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td colspan="2" valign="bottom" width="33">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td colspan="2" valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="446">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="27" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="27">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                expense&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">101.3</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">41.8</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">38.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                income</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(15.6</div>
            </td>
            <td valign="bottom" width="20" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="27" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(3.8</div>
            </td>
            <td valign="bottom" width="20" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="27" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="446">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                expense, net</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">85.7</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">38.0</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">38.6</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Foreign Currency
      Translation</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">With
      the exception of foreign subsidiaries operating in highly inflationary
      economies, which are measured in U.S. dollars, assets and liabilities of foreign
      subsidiaries are translated into U.S. dollars at the foreign exchange rates
      in
      effect at the end of the period. Revenues and expenses of foreign subsidiaries
      are translated using an average of the foreign exchange rates in effect during
      the period. Translation adjustments that arise from translating a foreign
      subsidiary&#8217;s financial statements from the functional currency to U.S. dollars
      are reflected in accumulated other comprehensive loss in the consolidated
      balance sheets. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Transaction
      gains and losses that arise from foreign exchange rate fluctuations on
      transactions denominated in a currency other than the functional currency,
      except those transactions which operate as a hedge of a foreign currency
      investment position, are included in the statements of operations as incurred.
      </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-96</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(2) Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Stock-Based
      Compensation </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">On
      January&#160;1, 2006, the Company adopted the provisions of SFAS No. 123(R),
&#8220;Share-Based Payment,&#8221; using the modified prospective transition method and
      recognized income of $2.9&#160;million as a cumulative effect of a change in
      accounting principle related to a change in accounting for forfeitures. There
      was no income tax effect resulting from this adoption (Note 9, &#8220;Income Taxes&#8221;).
      SFAS No. 123(R) requires the estimation of expected forfeitures at the grant
      date and the recognition of compensation cost only for those awards expected
      to
      vest. Previously, the Company accounted for forfeitures as they occurred. The
      adoption of SFAS No. 123(R) did not &#160;result in the recognition of
      additional compensation cost related to outstanding unvested awards, as the
      Company recognized compensation cost using the fair value provisions of SFAS
      No.
      123, &#8220;Accounting for Stock-Based Compensation,&#8221; for all employee awards granted
      after January&#160;1, 2003. The pro forma effect on net income (loss) and net
      income (loss) per share, as if the fair value recognition provisions had been
      applied to all outstanding and unvested awards granted prior to January&#160;1,
      2003, is shown below (in millions, except per share data): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="335">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="47">
            </td>
            <td width="22">
            </td>
            <td width="7">
            </td>
            <td width="32">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="447">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="155" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="447">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="73">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="30">&#160;</td>
            <td colspan="2" valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="447">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="447">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income (loss), as
                reported&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(1,381.5</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">422.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="447">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Add:
                Stock-based employee compensation expense included in reported<br>net
                income (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">14.7</div>
            </td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">10.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="447">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deduct:
                Total stock-based employee compensation expense determined under<br>fair
                value based method for all awards</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(18.1</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(21.6</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt" align="center">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="447">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income (loss), pro forma</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="63" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(1,384.9</div>
            </td>
            <td valign="bottom" width="30" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">411.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="447">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income (loss) per share:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="63">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="447">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic
                &#8211; as reported</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(20.57</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">6.18</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="447">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic
                &#8211; pro forma</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(20.62</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">6.03</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="447">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted
                &#8211; as reported</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(20.57</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">5.77</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="447">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted
                &#8211; pro forma</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="63">
              <div style="MARGIN: 0pt" align="right">(20.62</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">5.63</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      year ended December&#160;31, 2006, total stock-based employee compensation
      expense was $32.0&#160;million. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">For further information
      related to the Company&#8217;s stock-based compensation programs, see Note 11,
&#8220;Stock-Based Compensation.&#8221; </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Net Income (Loss)
      Per Share </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Basic
      net income (loss) per share is computed using the weighted average common shares
      outstanding during the period. Diluted net income (loss) per share includes
      the
      dilutive effect of common stock equivalents using the average share price during
      the period. In addition, when the impact is dilutive, diluted net income per
      share is calculated by increasing net income for the after-tax interest expense
      on convertible debt and by increasing total shares outstanding by the number
      of
      shares that would be issuable upon conversion. Prior to the repurchase of
      substantially all of the Company&#8217;s outstanding zero-coupon convertible notes
      during 2006, there were 4,813,056 shares issuable upon conversion of the
      Company&#8217;s convertible zero-coupon senior notes. Tables summarizing net income
      (loss), for diluted net income (loss) per share (in millions) and shares
      outstanding are shown below: </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="315">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="29">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="15">
            </td>
            <td width="6">
            </td>
            <td width="28">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="420">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="186" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="420">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="51">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="420">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="420">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income
                (loss)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">(707.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(1,381.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">422.2</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="420">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Add:
                After-tax interest expense on convertible debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="420">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income (loss), for diluted net income (loss) per share</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(707.5</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(1,381.5</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">431.5</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-97</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(2) Summary of
      Significant Accounting Policies &#8211; (continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="291">
            </td>
            <td width="12">
            </td>
            <td width="46">
            </td>
            <td width="12">
            </td>
            <td width="46">
            </td>
            <td width="12">
            </td>
            <td width="45">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="388">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="218" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="388">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="388">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="388">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Weighted
                average common shares
                outstanding&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">68,607,262</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">67,166,668</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">68,278,858</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="388">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Dilutive
                effect of common stock equivalents</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61">
              <div style="MARGIN: 0pt" align="right">1,635,349</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="388">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Shares
                issuable upon conversion of convertible debt</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,813,056</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="388">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted
                shares outstanding</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">68,607,262</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">67,166,668</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="61" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">74,727,263</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For
      further information related to the zero-coupon convertible senior notes, see
      Note 8, &#8220;Long-Term Debt.&#8221; </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      shares issuable upon conversion of the Company&#8217;s outstanding zero-coupon
      convertible debt and the effect of common stock equivalents, including options,
      restricted stock units, performance units and stock appreciation rights were
      excluded from the computation of diluted shares outstanding for the years ended
      December&#160;31, 2006 and 2005, as inclusion would have resulted in
      antidilution. A summary of these options and their exercise prices, as well
      as
      these restricted stock units, performance units and stock appreciation rights,
      is shown below: </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="262">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="60">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="60">
            </td>
            <td width="12">
            </td>
            <td width="37">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="350">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="7" valign="bottom" width="256" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="350">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="86">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="86">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="350">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="80" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="80" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="350">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Options</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="80">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="80">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="350">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Antidilutive
                options&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt" align="center">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="80">
              <div style="MARGIN: 0pt" align="right">2,790,305</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="80">
              <div style="MARGIN: 0pt" align="right">2,983,405</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="350">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Exercise
                prices</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="80">
              <div style="MARGIN: 0pt" align="right">22.12 &#8211; $55.33</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="80">
              <div style="MARGIN: 0pt" align="right">22.12 &#8211; $55.33</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="350">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Restricted
                stock units</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="80">
              <div style="MARGIN: 0pt" align="right">1,964,571</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="80">
              <div style="MARGIN: 0pt" align="right">2,234,122</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="350">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Performance
                units</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="80">
              <div style="MARGIN: 0pt" align="right">169,909</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="80">
              <div style="MARGIN: 0pt" align="right">123,672</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="350">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Stock
                appreciation rights</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="80">
              <div style="MARGIN: 0pt" align="right">1,751,854</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="80">
              <div style="MARGIN: 0pt" align="right">1,215,046</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Use of Estimates
      </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      preparation of the consolidated financial statements in conformity with
      accounting principles generally accepted in the United States requires
      management to make estimates and assumptions that affect the reported amounts
      of
      assets and liabilities as of the date of the consolidated financial statements
      and the reported amounts of revenues and expenses during the reporting period.
      During 2006, there were no material changes in the methods or policies used
      to
      establish estimates and assumptions. Generally, matters subject to estimation
      and judgment include amounts related to accounts receivable realization,
      inventory obsolescence, asset impairments, useful lives of intangible and fixed
      assets and unsettled pricing discussions with customers and suppliers (Note
      2,
&#8220;Summary of Significant Accounting Policies&#8221;); restructuring accruals (Note 5,
&#8220;Restructuring&#8221;); deferred tax asset valuation allowances and income taxes (Note
      9, &#8220;Income Taxes&#8221;); pension and other postretirement benefit plan assumptions
      (Note 10, &#8220;Pension and Other Postretirement Benefit Plans&#8221;); accruals related to
      litigation, warranty and environmental remediation costs (Note 12, &#8220;Commitments
      and Contingencies&#8221;); and self-insurance accruals. Actual results may differ from
      estimates provided. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Reclassifications
      </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Certain
      amounts in prior years&#8217; financial statements have been reclassified to conform
      to the presentation used in the year ended December&#160;31, 2006. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-98</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(3) Divestiture of
      Interior Business </strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>European Interior
      Business </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      October&#160;16, 2006, the Company completed the contribution of substantially
      all of its European interior business to International Automotive Components
      Group, LLC (&#8220;IAC Europe&#8221;), the Company&#8217;s joint venture with WL Ross &amp; Co.
      LLC (&#8220;WL Ross&#8221;) and Franklin Mutual Advisers, LLC (&#8220;Franklin&#8221;), in exchange for
      a one-third equity interest. In connection with the transaction, the Company
      entered into various ancillary agreements providing the Company with customary
      minority shareholder rights and registration rights with respect to its equity
      interest in IAC Europe. The Company&#8217;s European interior business included
      substantially all of its interior components business in Europe (other than
      Italy and one facility in France), consisting of nine manufacturing facilities
      in five countries supplying door panels, overhead systems, instrument panels,
      cockpits and interior trim to various original equipment manufacturers. IAC
      Europe also owns the European interior business formerly held by Collins &amp;
Aikman Corporation. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      connection with this transaction, the Company recorded the fair market value
      of
      its initial investment in IAC Europe at $105.6&#160;million and recognized a
      pretax loss of approximately $29.1&#160;million. This loss is recorded as part
      of the Company&#8217;s loss on divestiture of interior business in the statement of
      operations for the year ended December&#160;31, 2006. The Company did not
      account for the divestiture of its European interior business as a discontinued
      operation due to its continuing involvement with IAC Europe. The Company&#8217;s
      investment in IAC Europe is accounted for under the equity method of accounting
      (Note 6, &#8220;Investments in Affiliates and Other Related Party Transactions&#8221;).
</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>North American
      Interior Business </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      November&#160;30, 2006, the Company entered into an Asset Purchase Agreement
      with International Automotive Components Group North America, Inc. and
      International Automotive Components Group North America, LLC (together, &#8220;IAC
      North America&#8221;), WL Ross and Franklin, under which the Company agreed to
      transfer substantially all of the assets of the Company&#8217;s North American
      interior business, as well as interests in two China joint ventures and
      $25&#160;million of cash, to IAC North America. Under the terms of the
      agreement, the Company will receive a 25% equity interest in IAC North America
      and warrants to purchase an additional 7% equity interest. In addition, under
      the terms of the agreement, the Company will be obligated to fund up to an
      additional $40&#160;million to the IAC North America joint venture, in the event
      that the joint venture does not meet certain financial targets in 2007. The
      Asset Purchase Agreement also contains a closing date net working capital
      adjustment provision and requires the Company to have a minimum level of
      recoverable customer engineering and tooling as of the closing date. The closing
      of the transaction contemplated by the agreement is subject to various
      conditions, including the receipt of required third-party consents, as well
      as
      other closing conditions customary for transactions of this type. The
      transaction is expected to close in the first quarter of 2007. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-99</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(3) Divestiture of
      Interior Business &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      Company accounted for the North American interior business as held for sale
      as
      of December&#160;31, 2006, in accordance with SFAS No. 144, &#8220;Accounting for the
      Impairment or Disposal of Long-Lived Assets.&#8221; Accordingly, the Company recorded
      an estimated pretax loss of $606.9&#160;million to adjust the net carrying value
      of the assets and liabilities of the North American interior business to their
      recovery value under the terms of the agreement. The Company expects to incur
      additional losses on the divestiture through the transaction closure date.
      The
      total pretax loss is expected to be in the range of $650&#160;million to
      $675&#160;million. The Company will not account for the divestiture as a
      discontinued operation due to its continuing involvement with IAC North America.
      The Company will account for its investment in IAC North America under the
      equity method of accounting effective upon the closing of the transaction.
      The
      major classes of the assets and liabilities of the Company&#8217;s North American
      interior business that are classified as held for sale in the Company&#8217;s
      consolidated balance sheets are shown below (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="373">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="24">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="498">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="107" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="498">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="39">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="498">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash
                equivalents&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">19.2</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">10.3</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                receivable</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">284.5</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">337.5</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">69.2</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">92.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Recoverable
                customer engineering and tooling</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">52.7</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">157.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                current assets</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.2</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">10.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Current
                assets of business held for sale</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">427.8</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">607.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment, net</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">404.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                long-term assets</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">80.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Long-term
                assets of business held for sale</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">485.2</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                assets of business held for sale</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">427.8</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,092.9</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="374">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="24">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="498">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="107" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="498">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="39">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="498">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable and
                drafts&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt" align="justify">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">323.7</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">477.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accrued
                liabilities</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">79.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">71.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                portion of long-term debt</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Current
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">405.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">549.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">19.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                long-term liabilities</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">28.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27.6</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Long-term
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">48.5</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="498">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="justify">$</div>
            </td>
            <td valign="bottom" width="32" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">454.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">576.9</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The total
      assets of business held for sale include recoverable customer engineering and
      tooling contracts and other monetary assets amounting to $92.9&#160;million for
      which valuation allowances have been recorded in consolidation in order to
      determine the loss on the transaction. The fair value of these monetary assets
      approximates the carrying value indicated above before any valuation allowances.
      </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For
      further information on the operating results of the Company&#8217;s interior business,
      see Note 13, &#8220;Segment Reporting.&#8221; </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(4) Sale of Common
      Stock</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      November&#160;8, 2006, the Company completed the sale of 8,695,653 shares of
      common stock for an aggregate purchase price of $23 per share to affiliates
      of
      and funds managed by Carl C. Icahn. The net proceeds from the sale of
      $199.2&#160;million will be used for general corporate purposes, including
      strategic investments in the Company&#8217;s core businesses. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-100</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(5)
      Restructuring</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>2006 and
      2005</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In order
      to address unfavorable industry conditions, the Company began to implement
      consolidation and census actions in the second quarter of 2005. These actions
      are part of a comprehensive restructuring strategy intended to (i)&#160;better
      align the Company&#8217;s manufacturing capacity with the changing needs of its
      customers, (ii) eliminate excess capacity and lower the operating costs of
      the
      Company and (iii) streamline the Company&#8217;s organizational structure and
      reposition its business for improved long-term profitability. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      connection with the restructuring actions, the Company currently expects to
      incur pre-tax costs of approximately $300&#160;million, although all aspects of
      the restructuring actions have not been finalized. Such costs will include
      employee termination benefits, asset impairment charges and contract termination
      costs, as well as other incremental costs resulting from the restructuring
      actions. These incremental costs will principally include equipment and
      personnel relocation costs. The Company also expects to incur incremental
      manufacturing inefficiency costs at the operating locations impacted by the
      restructuring actions during the related restructuring implementation period.
      Restructuring costs will be recognized in the Company&#8217;s consolidated financial
      statements in accordance with accounting principles generally accepted in the
      United States. Generally, charges will be recorded as elements of the
      restructuring strategy are finalized. Actual costs recorded in the Company&#8217;s
      consolidated financial statements may vary from current estimates. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      connection with the Company&#8217;s restructuring actions, the Company recorded
      charges of $93.2&#160;million in 2006. This consists of $81.9&#160;million
      recorded as cost of sales and $17.2&#160;million recorded as selling, general
      and administrative expenses, offset by net gains on the sales of two facilities
      and machinery and equipment, which are recorded as other expense, net. The
      2006
      charges consist of employee termination benefits of $79.3&#160;million, asset
      impairment charges of $5.8&#160;million and contract termination costs of
      $6.5&#160;million, as well as other net costs of $1.6&#160;million. Employee
      termination benefits were recorded based on existing union and employee
      contracts, statutory requirements and completed negotiations. Asset impairment
      charges relate to the disposal of buildings, leasehold improvements and
      machinery and equipment with carrying values of $5.8&#160;million in excess of
      related estimated fair values. Contract termination costs include lease
      cancellation costs of $0.8&#160;million, which was paid in 2006, the repayment
      of various government-sponsored grants of $0.7&#160;million, costs associated
      with the termination of subcontractor and other relationships of
      $4.1&#160;million and pension benefit curtailment charges of $0.9&#160;million.
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of the 2006 restructuring charges, excluding the $0.9&#160;million
      pension and other postretirement benefit plan curtailments, is shown below
      (in
      millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="206">
            </td>
            <td width="13">
            </td>
            <td width="10">
            </td>
            <td width="38">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="23">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="22">
            </td>
            <td width="19">
            </td>
            <td width="8">
            </td>
            <td width="25">
            </td>
            <td width="13">
            </td>
            <td width="10">
            </td>
            <td width="38">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="275">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" rowspan="2" valign="bottom" width="65" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Accrual
                as
                of<br>December&#160;31,<br>2005</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" rowspan="2" valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Charges</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="107" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><br><strong>Utilization</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" rowspan="2" valign="bottom" width="65" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Accrual
                as
                of<br>December&#160;31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="275">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Cash</strong></div>
            </td>
            <td valign="bottom" width="25">&#160;</td>
            <td colspan="2" valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-cash</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="275">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="31">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="25">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="275">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Employee
                termination
                benefits&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">15.1</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">79.3</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">(58.0</div>
            </td>
            <td valign="bottom" width="25">
              <div style="MARGIN: 0pt">) &#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">36.4</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="275">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Asset
                impairments</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">5.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="25">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(5.8</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="275">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Contract
                termination costs</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">5.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">5.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">(7.2</div>
            </td>
            <td valign="bottom" width="25">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">3.4</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="275">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                related costs</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="14" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="31" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="29" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1.6</div>
            </td>
            <td valign="bottom" width="25">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="14" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="275">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="14" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">20.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">92.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="29" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(66.8</div>
            </td>
            <td valign="bottom" width="25" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(5.8</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">39.8</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      connection with the Company&#8217;s restructuring actions, the Company recorded
      charges of $88.9&#160;million in 2005, including $84.6&#160;million recorded as
      cost of sales and $6.2&#160;million recorded as selling, general and
      administrative expenses. The remaining amounts include a gain on the sale of
      a
      facility, which is recorded as other expense, net. The 2005 charges consist
      of
      employee termination benefits of $56.5&#160;million, asset impairment charges of
      $15.1&#160;million and contract termination costs of $13.5&#160;million, as well
      as other net costs of $3.8&#160;million. Employee termination benefits were
      recorded based on existing union and employee contracts, statutory requirements
      and completed negotiations. Asset impairment charges relate to the disposal
      of
      buildings, leasehold improvements and machinery and equipment with carrying
      values of $15.1&#160;million in excess of related estimated fair values.
      Contract </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-101</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(5) Restructuring
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">termination costs include
      lease cancellation costs of $3.4&#160;million, which are expected to be paid
      through 2006, the repayment of various government-sponsored grants of
      $4.8&#160;million, the termination of joint venture, subcontractor and other
      relationships of $3.2&#160;million and pension and other postretirement benefit
      plan curtailments of $2.1&#160;million. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of the 2005 restructuring charges, excluding the $2.1&#160;million
      pension and other postretirement benefit plan curtailments, is shown below
      (in
      millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="271">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="23">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="22">
            </td>
            <td width="16">
            </td>
            <td width="6">
            </td>
            <td width="27">
            </td>
            <td width="13">
            </td>
            <td width="10">
            </td>
            <td width="38">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="362">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="103" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><br><strong>Utilization</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" rowspan="2" valign="bottom" width="65" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Accrual
                as
                of<br>December&#160;31,<br>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="362">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="39">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Charges</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="36">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Cash</strong></div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td colspan="2" valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-cash</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="362">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="31" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="29" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="36">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="362">
              <div style="MARGIN-TOP: 2pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Employee
                termination
                benefits&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">56.5</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">(41.4</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">15.1</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="362">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Asset
                impairments</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">15.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(15.1</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="362">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Contract
                termination costs</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">11.4</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">(6.4</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">5.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="362">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                related costs</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="31" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="29" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(3.8</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="14" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="362">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">86.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="29" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(51.6</div>
            </td>
            <td valign="bottom" width="22" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(15.1</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="14" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">20.1</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>2004</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In 2004,
      the Company recorded $7.8&#160;million for employee termination benefits and
      asset impairments at two U.S. seating facilities. In addition, the Company
      also
      incurred $39.9&#160;million in estimated costs related to additional facility
      consolidations and closures and census reductions. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-102</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(6) Investments in
      Affiliates and Other Related Party Transactions</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      Company&#8217;s beneficial ownership in affiliates accounted for under the equity
      method is shown below: </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="327">
            </td>
            <td width="12">
            </td>
            <td width="25">
            </td>
            <td width="20">
            </td>
            <td width="27">
            </td>
            <td width="20">
            </td>
            <td width="25">
            </td>
            <td width="8">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="436">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="160" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="436">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="436">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37" style="border-top: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Honduras
                Electrical Distribution Systems S. de R.L. de C.V. (Honduras)</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">60</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">60</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">60</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt" align="right">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Lear-Kyungshin
                Sales and Engineering LLC</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">60</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">60</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">60</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Shanghai
                Lear STEC Automotive Parts Co., Ltd. (China)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">55</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">55</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">55</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Lear
                Shurlok Electronics (Proprietary) Limited (South Africa)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">51</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">51</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Industrias
                Cousin Freres, S.L. (Spain)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Hanil
                Lear India Private Limited (India)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Nanjing
                Lear Xindi Automotive Interiors Systems Co., Ltd. (China)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Lear
                Dongfeng Automotive Seating Co., Ltd. (China)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Dong
                Kwang Lear Yuhan Hoesa (Korea)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Tacle
                Seating USA, LLC</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">49</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Jiangxi
                Jiangling Lear Interior Systems Co. Ltd. (China)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">41</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">41</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">41</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Beijing
                Lear Dymos Automotive Seating and Interior Co., Ltd. (China)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">40</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">40</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                Interior Systems &#8212; America, LLC</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">39</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">39</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">39</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">UPM
                S.r.L. (Italy)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">39</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">39</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">39</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Markol
                Otomotiv Yan Sanayi VE Ticaret A.S. (Turkey)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">35</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">35</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">35</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">International
                Automotive Components Group, LLC</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">33</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Lear
                Diamond Electro-Circuit Systems Co., Ltd. (Japan)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">RecepTec
                Holdings, L.L.C.</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">21</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">21</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Shenyang
                Lear Automotive Seating and Interior Systems Co., Ltd. (China)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">60</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Lear
                Furukawa Corporation</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">51</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Lear-NHK
                Seating and Interior Co., Ltd. (Japan)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">50</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Bing
                Assembly Systems, L.L.C.</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">49</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">JL
                Automotive, LLC</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">49</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Precision
                Fabrics Group, Inc.</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">43</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="436">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Klingel
                Italiana S.R.L. (Italy)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">40</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Summarized
      group financial information for affiliates accounted for under the equity method
      as of December&#160;31, 2006 and 2005, and for the years ended December&#160;31,
      2006, 2005 and 2004, is shown below (unaudited; in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="385">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="23">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="23">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="513">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="93" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="513">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="38">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="513">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="31" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="513">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                sheet data:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="513">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">580.1</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">183.8</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="513">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Non-current
                assets</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">317.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">64.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="513">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">610.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">186.0</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="513">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Non-current
                liabilities</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">12.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">16.5</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="325">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="23">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="434">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="172" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="434">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="37">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="434">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="31" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="434">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                statement data:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="434">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                sales&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">956.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">1,248.4</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">1,127.1</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="434">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gross
                profit</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">50.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">56.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">87.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="434">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                before provision for income taxes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">16.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">0.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">16.0</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="434">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">11.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(4.2</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">11.3</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-103</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(6) Investments in
      Affiliates and Other Related Party Transactions &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December&#160;31, 2006 and 2005, the Company&#8217;s aggregate investment in
      affiliates was $141.3&#160;million and $28.5&#160;million, respectively. In
      addition, the Company had notes and advances due from affiliates of
      $12.8&#160;million and $2.8&#160;million as of December&#160;31, 2006 and 2005,
      respectively. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of transactions with affiliates and other related parties is shown
      below
      (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="338">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="19">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="451">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="155" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="451">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="41">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="451">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="26" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Sales
                to
                affiliates&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt" align="justify">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="26">
              <div style="MARGIN: 0pt" align="right">35.8</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">144.9</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">140.3</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Purchases
                from affiliates</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="26">
              <div style="MARGIN: 0pt" align="right">51.1</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">224.9</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">120.9</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Purchases
                from other related parties(1)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="26">
              <div style="MARGIN: 0pt" align="right">12.5</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">13.6</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">12.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Management
                and other fees for services provided to affiliates</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="26">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">0.6</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">3.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="451">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Dividends
                received from affiliates</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="26">
              <div style="MARGIN: 0pt" align="right">1.6</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">5.3</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">3.2</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 13pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">(1)
      </div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 2.5pt">Includes
      $4.0&#160;million, $4.3&#160;million and $3.5&#160;million in 2006, 2005 and
      2004, respectively, paid to CB Richard Ellis (formerly Trammell Crow Company
      in
      2005 and 2004) for real estate brokerage, as well as property and project
      management services; includes $6.6&#160;million, $7.0&#160;million and
      $7.3&#160;million in 2006, 2005 and 2004, respectively, paid to Analysts
      International, Sequoia Services Group for the purchase of computer equipment
      and
      for computer-related services; includes $0.5&#160;million, $0.4&#160;million and
      $0.4&#160;million in 2006, 2005 and 2004, respectively, paid to Elite Support
      Management Group, L.L.C. for the provision of information technology temporary
      support personnel; includes $1.4&#160;million, $1.9&#160;million and
      $1.3&#160;million in 2006, 2005 and 2004, respectively, paid to Creative Seating
      Innovations, Inc. for prototype tooling and parts; and includes
      $0.7&#160;million and $2.4&#160;million in 2006 and 2005, respectively, paid to
      the Materials Group for plastic resins. Each entity employed a relative of
      the
      Company&#8217;s Chairman and Chief Executive Officer in 2006. In addition, Elite
      Support Management and Creative Seating Innovations were each partially owned
      by
      relatives of the Company&#8217;s Chairman and Chief Executive Officer in 2006. As a
      result, such entities may be deemed to be related parties. These purchases
      were
      made in the ordinary course of the Company&#8217;s business and in accordance with the
      Company&#8217;s normal procedures for engaging service providers or normal sourcing
      procedures for suppliers, as applicable. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company&#8217;s investments in Honduras Electrical Distribution Systems S. de R.L. de
      C.V., Lear-Kyungshin Sales and Engineering LLC and Shanghai Lear STEC Automotive
      Parts Co., Ltd. are accounted for under the equity method as the result of
      certain approval rights granted to the minority shareholder. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company guarantees 60% of certain of the debt of Honduras Electrical
      Distribution Systems S. de R.L. de C.V., 40% of certain of the debt of Beijing
      Lear Dymos Automotive Seating and Interior Co., Ltd. and 39% of certain of
      the
      debt of Total Interior Systems &#8212; America, LLC. As of December&#160;31, 2006, the
      amount of debt guaranteed by the Company was $17.9&#160;million. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>2006</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      October&#160;2006, the Company completed the contribution of substantially all
      of its European interior business to International Automotive Components Group,
      LLC, a joint venture the Company formed with WL Ross and Franklin (Note 3,
      &#8220;Divestiture of Interior Business&#8221;). In February&#160;2006, the Company formed
      Tacle Seating USA, LLC, a joint venture with Tachi-S Engineering U.S.A., Inc.,
      to manufacture and supply seat systems. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Also
      in
      2006, the Company divested its ownership interest in RecepTec Holdings, L.L.C,
      recognizing a gain of $13.4&#160;million, which is reflected in equity in net
      (income) loss in affiliates in the consolidated statement of operations for
      the
      year ended December&#160;31, 2006. In addition, the Company and its joint
      venture partner dissolved Lear Diamond Electro-Circuit Systems Co., Ltd. </div>
    <div style="FONT-SIZE: 12pt; MARGIN: 0pt; LINE-HEIGHT: 14pt">&#160;</div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-104</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(6) Investments in
      Affiliates and Other Related Party Transactions &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>2005</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      December&#160;2005, the Company engaged in the restructuring of two of its
      previously unconsolidated affiliates, Bing Assembly Systems, L.L.C. (&#8220;BAS&#8221;) and
      JL Automotive, LLC (&#8220;JLA&#8221;), which involved capital restructurings, changes in
      the investors and amendments to the related operating agreements. Each venture
      assembles, sequences and manufactures automotive interior components. These
      restructurings resulted in the recognition of a $29.8&#160;million loss, which
      is reflected in equity in net (income) loss of affiliates in the accompanying
      statement of operations for the year ended December&#160;31, 2005. In addition,
      as part of the restructurings, a new joint venture partner, Comer Holdings,
      LLC,
      acquired a 51% ownership interest in Integrated Manufacturing and Assembly,
      LLC
      (formerly BAS) and CL Automotive, LLC (formerly JLA) with Lear retaining a
      49%
      ownership interest in both of these ventures. Upon the completion of these
      restructurings, which were effective December&#160;31, 2005, it was determined
      that both of these ventures are variable interest entities and that the Company
      is the primary beneficiary due to its financing of the ventures through member
      loans and through various amendments to the respective operating agreements.
      Accordingly, the assets and liabilities of these ventures are reflected in
      the
      Company&#8217;s consolidated financial statements. The equity interests of the
      ventures not owned by the Company are reflected as minority interests in the
      Company&#8217;s consolidated financial statements as of December&#160;31, 2005. The
      operating results of these ventures are included in the consolidated statements
      of operations from the date of consolidation, December&#160;31, 2005. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      January&#160;2005, the Company acquired an additional 29% of Lear Furukawa
      Corporation (&#8220;Lear Furukawa&#8221;) for $2.3&#160;million, increasing its ownership
      interest to 80%. The acquisition was accounted for as a purchase, and
      accordingly, the assets purchased and liabilities assumed are reflected in
      the
      Company&#8217;s consolidated financial statements. The operating results of Lear
      Furukawa are included in the consolidated statement of operations from the
      date
      of acquisition. The operating results of the Company, after giving pro forma
      effect to this acquisition, are not materially different from reported results.
      Previously, Lear Furukawa was accounted for under the equity method as
      shareholder resolutions required a two-thirds majority vote for approval of
      corporate actions. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      July&#160;2005, the Company began reflecting the financial position and results
      of operations of Shenyang Lear Automotive Seating and Interior Systems Co.,
      Ltd.
      (&#8220;Shenyang&#8221;) in its consolidated financial statements, due to a change in the
      approval rights granted to the minority shareholder. Previously, Shenyang was
      accounted for under the equity method as certain shareholder resolutions
      required unanimous shareholder approval. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Also
      in
      2005, the Company divested its ownership interest in Precision Fabrics Group,
      Inc. (&#8220;Precision Fabrics&#8221;) and recognized a charge of $16.9&#160;million. This
      charge is reflected in equity in net (income) loss of affiliates in the
      consolidated statement of operations for the year ended December&#160;31, 2005.
      In addition, in 2005, the Company sold its ownership interests in Klingel
      Italiana S.R.L and dissolved Lear-NHK Seating and Interior Co., Ltd. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>2004</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      December&#160;2004, the Company formed Dong Kwang Lear Yuhan Hoesa, a joint
      venture with Dong Kwang Tech Co., Ltd., to manufacture and supply seat systems
      in Korea. In October&#160;2004, the Company formed Beijing Lear Dymos Automotive
      Seating and Interior Co., Ltd., a joint venture with Dymos Incorporated, to
      manufacture and supply seat systems in China. In February&#160;2004, the Company
      formed two joint ventures, Lear-Kyungshin Sales and Engineering LLC and Honduras
      Electrical Distribution Systems S. de R.L. de C.V. (collectively, the &#8220;Kyungshin
      affiliates&#8221;), with Kyungshin Industrial Co., Ltd. to manufacture and supply wire
      harnesses. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Also
      in
      2004, the Company sold its ownership interests in Corporate Eagle Two, L.L.C.,
      Saturn Electronics Texas, L.L.C. and Nawon Ind. Co., Ltd. (&#8220;Nawon&#8221;). </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      conjunction with the acquisition of GHW Grote &amp; Hartmann GmbH in
      July&#160;2004, the Company assumed a 40% ownership interest in Klingel Italiana
      S.R.L. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-105</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(7) Short-Term
      Borrowings</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company utilizes other uncommitted lines of credit as needed for its short-term
      working capital fluctuations. As of December&#160;31, 2006, the Company had
      unused unsecured lines of credit available from banks of $165.0&#160;million,
      subject to certain restrictions imposed by the New Credit Agreement (Note 8,
      &#8220;Long-Term Debt&#8221;). As of December&#160;31, 2006 and 2005, the weighted average
      interest rate on outstanding borrowings was 4.0% and 5.0%, respectively. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(8) Long-Term
      Debt</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of long-term debt and the related weighted average interest rates,
      including the effect of hedging activities described in Note 14, &#8220;Financial
      Instruments,&#8221; is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="232">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="44">
            </td>
            <td width="20">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="44">
            </td>
            <td width="8">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="310">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="9" valign="bottom" width="285" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="310">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="4" valign="bottom" width="129">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td colspan="4" valign="bottom" width="129" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="310">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt"><strong>Debt
                Instrument</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="52" style="border-top: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Long-Term<br>Debt</strong></div>
            </td>
            <td valign="bottom" width="16" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-top: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Weighted<br>Average<br>Interest
                Rate</strong></div>
            </td>
            <td valign="bottom" width="27">&#160;</td>
            <td colspan="2" valign="bottom" width="52">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Long-Term<br>Debt</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Weighted<br>Average<br>Interest
                Rate</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="310" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="310">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amended
                and Restated Primary Credit
                Facility&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">997.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">7.49</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="center">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">400.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">5.67</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt" align="right">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="310">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">8.50%&#160;Senior
                Notes, due 2013</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">300.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">8.50</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="center">%</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="310">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">8.75%&#160;Senior
                Notes, due 2016</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">600.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">8.75</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="center">%</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="310">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">5.75%&#160;Senior
                Notes, due 2014</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">399.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">5.635</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="center">%</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">399.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">5.635</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt" align="right">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="310">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Zero-Coupon
                Convertible Senior Notes, due 2022</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">3.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">4.75</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="center">%</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">300.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">4.75</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt" align="right">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="310">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">8.125%&#160;Senior
                Notes, due 2008</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">73.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">8.125</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="center">%</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">295.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">8.125</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt" align="right">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="310">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">8.11%&#160;Senior
                Notes, due 2009</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">41.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">8.11</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="center">%</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">800.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">8.35</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt" align="right">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="310">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">45.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">7.06</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="center">%</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">57.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">6.34</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt" align="right">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="310">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">2,460.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">2,252.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="310">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                &#8212; current portion</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(25.6</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(9.4</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="310">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,434.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,243.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Primary Credit
      Facility</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      April&#160;25, 2006, the Company entered into a $2.7&#160;billion Amended and
      Restated Credit and Guarantee Agreement (the &#8220;New Credit Agreement&#8221;), which
      provides for maximum revolving borrowing commitments of $1.7&#160;billion and a
      term loan facility of $1.0&#160;billion. The New Credit Agreement replaced the
      Company&#8217;s prior primary credit facility. The $1.7&#160;billion revolving credit
      facility matures on March&#160;23, 2010, and the $1.0&#160;billion term loan
      facility matures on April&#160;25, 2012. The New Credit Agreement provides for
      multicurrency borrowings in a maximum aggregate amount of $750&#160;million,
      Canadian borrowings in a maximum aggregate amount of $200&#160;million and
      swing-line borrowings in a maximum aggregate amount of $300&#160;million, the
      commitments for which are part of the aggregate revolving credit facility
      commitment. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Of the
      $1.0&#160;billion proceeds under the term loan facility, $400.0&#160;million was
      used to repay the term loan facility under the Company&#8217;s prior primary credit
      facility and $521.1&#160;million was used to repurchase outstanding zero-coupon
      convertible senior notes with an accreted value of $303.2&#160;million, Euro
      13.0&#160;million aggregate principal amount of the Company&#8217;s senior notes due
      2008 and $206.6&#160;million aggregate principal amount of the Company&#8217;s senior
      notes due 2009. In connection with these transactions, the Company recognized
      a
      net gain of $0.6&#160;million on the extinguishment of debt, which is included
      in other expense, net in the consolidated statement of operations for the year
      ended December&#160;31, 2006. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-106</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(8) Long-Term Debt
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">As
      of
      December&#160;31, 2006, the Company had $997.0&#160;million in borrowings
      outstanding under the New Credit Agreement, all of which were outstanding under
      the term loan facility. There were no revolving borrowings outstanding. As
      of
      December&#160;31, 2006, the commitment fee on the $1.7&#160;billion revolving
      credit facility was 0.50% per annum. Borrowings and repayments under the
      Company&#8217;s New Credit Agreement (as well as predecessor facilities) are shown
      below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="357">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="37">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="37">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="476" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt"><strong>Year</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="57" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Borrowings</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Repayments</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="476">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="476">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2006&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">11,978.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">11,381.2</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="476">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2005</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">8,942.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">8,542.4</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="476">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2004</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">4,153.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">4,153.1</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Zero-Coupon
      Convertible Senior Notes </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      February&#160;2002, the Company issued $640.0&#160;million aggregate principal
      amount at maturity of zero-coupon convertible senior notes due 2022 (the
&#8220;Convertible Notes&#8221;), yielding gross proceeds of $250.3&#160;million. The
      Convertible Notes are unsecured and rank equally with the Company&#8217;s other
      unsecured senior indebtedness, including the Company&#8217;s other senior notes. Each
      Convertible Note of $1,000 principal amount at maturity was issued at a price
      of
      $391.06, representing a yield to maturity of 4.75%. Holders of the Convertible
      Notes may convert their notes at any time on or before the maturity date at
      a
      conversion rate, subject to adjustment, of 7.5204 shares of the Company&#8217;s common
      stock per note, provided that the average per share price of the Company&#8217;s
      common stock for the 20 trading days immediately prior to the conversion date
      is
      at least a specified percentage, beginning at 120% upon issuance and declining
      1/2% each year thereafter to 110% at maturity, of the accreted value of the
      Convertible Note, divided by the conversion rate (the &#8220;Contingent Conversion
      Trigger&#8221;). The Convertible Notes are also convertible (1) if the long-term
      credit rating assigned to the Convertible Notes by either Moody&#8217;s Investors
      Service or Standard &amp; Poor&#8217;s Ratings Services is reduced below Ba3 or BB-,
      respectively (which is currently the case), or either ratings agency withdraws
      its long-term credit rating assigned to the notes, (2) if the Company calls
      the
      Convertible Notes for redemption or (3) upon the occurrence of specified other
      events. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As
      discussed above, during the second quarter of 2006, the Company repurchased
      substantially all of the Convertible Notes with borrowings under its New Credit
      Agreement. As of December&#160;31, 2006, notes with an accreted value of
      $3.6&#160;million were outstanding. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Other Senior
      Notes
</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      November&#160;2006, the Company issued $300&#160;million aggregate principal
      amount of unsecured 8.50% senior notes due 2013 (the &#8220;2013 Notes&#8221;) and
      $600&#160;million aggregate principal amount of unsecured 8.75% senior notes due
      2016 (the &#8220;2016 Notes&#8221;). The notes are unsecured and rank equally with the
      Company&#8217;s other unsecured senior indebtedness, including the Company&#8217;s other
      senior notes. The proceeds from these notes were used to repurchase the
      Company&#8217;s senior notes due 2008 (the &#8220;2008 Notes&#8221;) and senior notes due 2009
      (the &#8220;2009 Notes&#8221;). The Company repurchased 2008 Notes and 2009 Notes with an
      aggregate principal amount of Euro 181.4&#160;million and $552.0&#160;million,
      respectively, for an aggregate purchase price of $835.8&#160;million, including
      related fees. In connection with these transactions, the Company recognized
      a
      loss of $48.5&#160;million on the extinguishment of debt, which is included in
      other expense, net in the consolidated statement of operations for the year
      ended December&#160;31, 2006. In January&#160;2007, the Company completed an
      exchange offer of the 2013 Notes and the 2016 Notes for substantially identical
      notes registered under the Securities Act of 1933, as amended. Interest on
      both
      the 2013 Notes and 2016 Notes is payable on June&#160;1 and December&#160;1 of
      each year. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-107</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(8) Long-Term Debt
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Company may redeem all or part of the 2013 Notes and the 2016 Notes, at its
      option, at any time subsequent to December&#160;1, 2010, in the case of the 2013
      Notes, and December&#160;1, 2011, in the case of the 2016 Notes, at the
      redemption prices set forth below, together with any interest accrued but not
      yet paid to the date of redemption. These redemption prices, expressed as a
      percentage of the principal amount due, are set forth below: </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="346">
            </td>
            <td width="13">
            </td>
            <td width="38">
            </td>
            <td width="8">
            </td>
            <td width="13">
            </td>
            <td width="39">
            </td>
            <td width="8">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="461">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="4" valign="bottom" width="133" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Twelve-Month
                Period<br>Commencing
                December&#160;1,</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="461">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="51">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2013
                Notes</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2016
                Notes</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="461">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="51" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="11" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="461">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2010&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">104.250</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="461">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2011</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">102.125</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">104.375</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="461">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2012</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">100.0</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">102.917</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="461">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2013</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">100.0</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">101.458</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="461">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2014
                and thereafter</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">100.0</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">100.0</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Company may redeem all or part of the 2013 Notes and the 2016 Notes, at its
      option, at any time prior to December&#160;1, 2010, in the case of the 2013
      Notes, and December&#160;1, 2011, in the case of the 2016 Notes, at the greater
      of (a) 100% of the principal amount of the notes to be redeemed or (b) the
      sum
      of the present values of the redemption price set forth above and the remaining
      scheduled interest payments from the redemption date through December&#160;1,
      2010, in the case of the 2013 Notes, or December&#160;1, 2011, in the case of
      the 2016 Notes, discounted to the redemption date on a semiannual basis at
      the
      applicable treasury rate plus 50 basis points, together with any interest
      accrued but not yet paid to the date of redemption. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">In
      addition to the senior notes discussed above, the Company has outstanding
      $399.3&#160;million aggregate principal amount of senior notes due 2014 (the
&#8220;2014 Notes&#8221;). Interest on the 2014 Notes is payable on February&#160;1 and
      August&#160;1 of each year. The Company also has outstanding Euro
      55.6&#160;million ($73.3&#160;million based on the exchange rate in effect as of
      December&#160;31, 2006) aggregate principal amount of 2008 Notes. Interest on
      the 2008 Notes is payable on April&#160;1 and October&#160;1 of each year.
      During 2006, the Company repurchased an aggregate principal amount of Euro
      194.4&#160;million ($257.0&#160;million based on the exchange rates in effect as
      of the transaction dates) of the 2008 Notes using proceeds from the issuance
      of
      the 2013 Notes and 2016 Notes and borrowings under the New Credit Agreement.
      In
      addition, the Company has outstanding $41.4&#160;million aggregate principal
      amount of 2009 Notes. Interest on the 2009 Notes is payable on May&#160;15 and
      November&#160;15 of each year. During 2006, the Company repurchased an aggregate
      principal amount of $758.6&#160;million of the 2009 Notes using proceeds from
      the issuance of the 2013 Notes and 2016 Notes and borrowings under the New
      Credit Agreement. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Company may redeem all or part of the 2014 Notes, the 2008 Notes and the 2009
      Notes, at its option, at any time, at the greater of (a) 100% of the principal
      amount of the notes to be redeemed or (b) the sum of the present values of
      the
      remaining scheduled payments of principal and interest thereon from the
      redemption date to the maturity date, discounted to the redemption date on
      a
      semiannual basis at the applicable treasury rate plus 20 basis points in the
      case of the 2014 Notes, at the Bund rate plus 50 basis points in the case of
      the
      2008 Notes and at the applicable treasury rate plus 50 basis points in the
      case
      of the 2009 Notes, together with any interest accrued but not yet paid to the
      date of the redemption. </div>
    <div style="MARGIN-TOP: 8.35pt; MARGIN-BOTTOM: 0pt"><strong><i>Guarantees</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      senior notes of the Company are senior unsecured obligations and rank pari
      passu
      in right of payment with all of the Company&#8217;s existing and future unsubordinated
      unsecured indebtedness. The Company&#8217;s obligations under the senior notes are
      guaranteed, on a joint and several basis, by certain of its subsidiaries, which
      are primarily domestic subsidiaries and all of which are directly or indirectly
      wholly owned by the Company (Note 18, &#8220;Supplemental Guarantor Condensed
      Consolidating Financial Statements&#8221;). The Company&#8217;s obligations under the New
      Credit Agreement are secured by a pledge of all or a portion of the capital
      stock of certain of its subsidiaries, including substantially all of its
      first-tier subsidiaries, and are partially secured by a security interest in
      the
      Company&#8217;s assets and the assets of certain of its domestic subsidiaries. In
      addition, the Company&#8217;s obligations under the New Credit Agreement are
      guaranteed by the same subsidiaries that guarantee the Company&#8217;s obligations
      under the senior notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-108</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(8) Long-Term Debt
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Covenants</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The New
      Credit Agreement contains certain affirmative and negative covenants, including
      (i) limitations on fundamental changes involving the Company or its
      subsidiaries, asset sales and restricted payments, (ii) a limitation on
      indebtedness with a maturity shorter than the term loan facility, (iii) a
      limitation on aggregate subsidiary indebtedness to an amount which is no more
      than 4% of consolidated total assets, (iv) a limitation on aggregate secured
      indebtedness to an amount which is no more than $100&#160;million and (v)
      requirements that the Company maintain an initial leverage ratio of not more
      than 4.0 to 1, as of December&#160;31, 2006, with decreases over time and an
      initial interest coverage ratio of not less than 2.50 to 1 with increases over
      time. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      leverage and interest coverage ratios, as well as the related components of
      their computation, are defined in the New Credit Agreement. The leverage ratio
      is calculated as the ratio of consolidated indebtedness to consolidated
      operating profit. For the purpose of the covenant calculation, (i) consolidated
      indebtedness is generally defined as reported debt, net of cash and excludes
      transactions related to the Company&#8217;s asset-backed securitization and factoring
      facilities and (ii) consolidated operating profit is generally defined as net
      income excluding income taxes, interest expense, depreciation and amortization
      expense, other income and expense, minority interests in income of subsidiaries
      in excess of net equity earnings in affiliates, certain restructuring and other
      non-recurring charges, extraordinary gains and losses and other specified
      non-cash items. Consolidated operating profit is a non-GAAP financial measure
      that is presented not as a measure of operating results, but rather as a measure
      used to determine covenant compliance under the Company&#8217;s primary credit
      facility. The interest coverage ratio is calculated as the ratio of consolidated
      operating profit to consolidated interest expense. For the purpose of the
      covenant calculation, consolidated interest expense is generally defined as
      interest expense plus any discounts or expenses related to the Company&#8217;s
      asset-backed securitization facility less amortization of deferred finance
      fees
      and interest income. As of December&#160;31, 2006, the Company was in compliance
      with all covenants set forth in the New Credit Agreement. The Company&#8217;s leverage
      and interest coverage ratios were 2.4 to 1 and 4.2 to 1, respectively. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Reconciliations
      of (i) consolidated indebtedness to reported debt, (ii) consolidated operating
      profit to income before provision for income taxes and cumulative effect of
      a
      change in accounting principle and (iii) consolidated interest expense to
      reported interest expense are shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="405">
            </td>
            <td width="13">
            </td>
            <td width="7">
            </td>
            <td width="42">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="540">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="65" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="540">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="56">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="540">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Consolidated
                indebtedness&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">1,996.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="540">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Cash
                and cash equivalents</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">502.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="540">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Reported
                debt</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="56" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,499.4</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-109</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(8) Long-Term
      Debt
&#8211; (continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="401">
            </td>
            <td width="13">
            </td>
            <td width="8">
            </td>
            <td width="41">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="534">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Year
                Ended<br>December&#160;31,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="534">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="55">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Consolidated
                operating profit</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">835.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(392.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Consolidated
                interest expense</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(200.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                on divestiture of interior business</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(636.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                expense, net (excluding certain costs related to asset-backed
                securitization facility)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(77.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Restructuring
                charges</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(105.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Impairment
                charges</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(12.9</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                non-cash items</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(64.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                before provision for income taxes, minority interests in consolidated
                subsidiaries, equity<br>in net income of affiliates and cumulative effect
                of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(653.4</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Consolidated
                interest expense</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">200.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Certain
                costs related to asset-backed securitization facility</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(8.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                of deferred financing fees</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">8.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Bank
                facility and other fees</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="534">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Reported
                interest expense</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">209.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The New
      Credit Agreement also contains customary events of default, including an event
      of default triggered by a change of control of the Company. The senior notes
      due
      2013 and 2016 (having an aggregate principal amount outstanding of
      $900&#160;million as of December&#160;31, 2006) provide holders of the notes the
      right to require the Company to repurchase all or any part of their notes at
      a
      purchase price equal to 101% of their principal amount, plus accrued and unpaid
      interest, upon a &#8220;change of control&#8221; (as defined in the indenture governing the
      notes). The transaction contemplated by the Agreement and Plan of Merger with
      affiliates of American Real Estate Partners, L.P. would not constitute a change
      of control for these purposes (Note 17, &#8220;Subsequent Event&#8221;). The indentures
      governing the Company&#8217;s other senior notes do not contain a change in control
      repurchase obligation. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">With
      the
      exception of the Convertible Notes, the senior notes also contain covenants
      restricting the ability of the Company and its subsidiaries to incur liens
      and
      to enter into sale and leaseback transactions. With respect to the indenture
      governing the Company&#8217;s Convertible Notes, the Company received consents from a
      majority of the holders of the Convertible Notes allowing the Company to execute
      a supplemental indenture which eliminated the covenants and related provisions
      in the indenture that restricted the Company&#8217;s ability to incur liens and to
      enter into sale and leaseback transactions. As of December&#160;31, 2006, the
      Company was in compliance with all covenants and other requirements set forth
      in
      its senior notes. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Other</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December&#160;31, 2006, other long-term debt was principally made up of amounts
      outstanding under term loans and capital leases. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-110</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(8) Long-Term
      Debt
&#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Scheduled
      Maturities</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">As
      of
      December&#160;31, 2006, the scheduled maturities of long-term debt for the five
      succeeding years are shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="417">
            </td>
            <td width="14">
            </td>
            <td width="6">
            </td>
            <td width="29">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="556" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt"><strong>Year</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Maturities</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="556">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="556">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT:
10.35pt">2007&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">25.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="556">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2008</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">85.9</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="556">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2009</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">53.1</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="556">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2010</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">10.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="556">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2011</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">8.6</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(9) Income
      Taxes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of income (loss) before provision for income taxes, minority interests
      in consolidated subsidiaries and equity in net (income) loss of affiliates
      and
      the components of provision for income taxes is shown below (in millions):
      </div>
    <div style="FONT-SIZE: 12pt; MARGIN: 0pt; LINE-HEIGHT: 14pt">&#160;</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="318">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="18">
            </td>
            <td width="7">
            </td>
            <td width="33">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="22">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="424">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="178" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="424">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="41">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td colspan="2" valign="bottom" width="54">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="424">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="10" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) before provision for income taxes, minority interests
                in<br>consolidated subsidiaries, equity in net (income) loss of affiliates
                and<br>cumulative effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Domestic</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(785.3</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt">) &#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(1,520.8</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">47.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">131.9</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">392.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">516.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(653.4</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(1,128.6</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">564.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Domestic
                provision for income taxes:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                provision (benefit)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">30.6</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(12.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">7.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                provision (benefit)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1.6</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">65.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(4.0</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                domestic provision</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">29.0</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">52.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                provision for income taxes:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                provision</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">79.3</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">162.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">112.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                provision (benefit)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(53.4</div>
            </td>
            <td valign="bottom" width="24" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(20.6</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">12.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                foreign provision</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">25.9</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">141.9</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">124.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Provision
                for income taxes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">54.9</div>
            </td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">194.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">128.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      domestic provision includes withholding taxes related to dividends and royalties
      paid by the Company&#8217;s foreign subsidiaries. The foreign deferred provision
      (benefit) includes the benefit of prior unrecognized net operating loss
      carryforwards of $14.1&#160;million, $1.8&#160;million and $5.7&#160;million for
      the years ended December&#160;31, 2006, 2005 and 2004, respectively. </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-111</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(9) Income Taxes
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of the differences between the provision (benefit) for income taxes
      calculated at the United States federal statutory income tax rate of 35% and
      the
      consolidated provision for income taxes is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="330">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="22">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="441">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="161" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="441">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="41">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="41">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="441">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="441">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) before provision for income taxes, minority interests
                in<br>consolidated subsidiaries, equity in net (income) loss of affiliates
                and<br>cumulative effect of a change in accounting principle multiplied
                by
                the<br>United States federal statutory rate </div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(228.7 </div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(395.0 </div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">197.5 </div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="441">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Differences
                in income taxes on foreign earnings, losses and remittances </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">10.2 </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(34.0 </div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">(46.5 </div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="441">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Valuation
                allowance adjustments </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">259.4 </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">275.2 </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">13.3 </div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="441">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Research
                and development credits </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(11.4 </div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(22.6 </div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">(16.6 </div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="441">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill
                impairment </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">1.0 </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">354.4 </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">&#8212; </div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="441">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investment
                credit / grants </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(6.7 </div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(22.8 </div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">(7.4 </div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="441">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">31.1 </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">39.1 </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(12.3 </div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="441">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Provision
                for income taxes </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">54.9 </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">194.3 </div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">128.0 </div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      years ended December&#160;31, 2006, 2005 and 2004, income in foreign
      jurisdictions with tax holidays was $109.2&#160;million, $54.7&#160;million and
      $143.4&#160;million, respectively. Such tax holidays generally expire from 2007
      through 2018. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Deferred
      income taxes represent temporary differences in the recognition of certain
      items
      for income tax and financial reporting purposes. A summary of the components
      of
      the net deferred income tax asset (liability) is shown below (in millions):
      </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="369">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="26">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="493">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="106" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="493">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="47">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="493">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                income tax assets:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Tax
                loss
                carryforwards&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt" align="justify">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt" align="justify">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">451.1</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">259.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Tax
                credit carryforwards</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">140.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">85.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Retirement
                benefit plans</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">113.5</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">90.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accrued
                liabilities</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">66.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">71.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Reserves
                related to current assets</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">41.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">29.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Self-insurance
                reserves</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">19.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">20.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Defined
                benefit plan liability adjustments</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">84.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">39.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                compensation</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">15.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">20.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Recoverable
                customer engineering and tooling</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">57.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                asset basis differences</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">102.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Derivative
                instruments and hedging</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">8.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">22.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="493">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,042.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">696.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="493">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Valuation
                allowance</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(843.9</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(478.3</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="493">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="justify">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">198.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">217.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-112</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(9) Income Taxes
&#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="377">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="26">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="503">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="99" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="503">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="41">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="503">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                income tax liabilities:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                asset basis
                differences&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(137.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Recoverable
                customer engineering and tooling</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(14.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Undistributed
                earnings of foreign subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(106.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(86.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(4.3</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="503">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(121.1</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(228.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                deferred income tax asset (liability)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">77.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(10.8</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">During
      2005, the Company concluded that it was no longer more likely than not that
      it
      would realize its U.S. deferred tax assets. As a result, in the fourth quarter
      of 2005, the Company recorded a tax charge of $300.3&#160;million comprised of
      (i) a full valuation allowance in the amount of $255.0&#160;million with respect
      to its net U.S. deferred tax assets and (ii) an increase in related tax reserves
      of $45.3&#160;million. During 2006, the Company continued to incur losses in the
      United States for which no tax benefit was recorded and the related U.S.
      valuation allowance increased to $545.0&#160;million. In addition, deferred tax
      assets have been fully offset by a valuation allowance in certain foreign
      jurisdictions due to a history of operating losses. The Company intends to
      maintain these valuation allowances until it is more likely than not that the
      deferred taxes within these countries will be realized. The classification
      of
      the net deferred income tax liability is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="377">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="22">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="29">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="503">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="99" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="503">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="37">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="503">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                income tax assets:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">83.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">138.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">110.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">76.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Deferred
                income tax liabilities:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">(20.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">(33.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt" align="center">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(96.0</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(192.1</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt" align="center">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="503">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                deferred income tax asset (liability)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">77.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(10.8</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt" align="center">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Deferred
      income taxes have not been provided on $975.6&#160;million of certain
      undistributed earnings of the Company&#8217;s foreign subsidiaries as such amounts are
      considered to be permanently reinvested. It is not practicable to determine
      the
      unrecognized deferred income tax liability on these earnings because the actual
      tax liability on these earnings, if any, is dependent on circumstances existing
      when remittance occurs. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Company operates in multiple jurisdictions throughout the world, and its tax
      returns are periodically audited or subject to review by both domestic and
      foreign tax authorities. The Company reviews its income tax positions on a
      continuous basis and records a tax reserve when it believes a liability is
      probable and can be reasonably estimated in accordance with SFAS No. 5,
&#8220;Accounting for Contingencies.&#8221; The tax issues which resulted in reserves will
      be resolved on an item by item basis upon the occurrence of certain events,
      which may include the resolution of tax audits and the expiration of the statute
      of limitations for the relevant taxing authority to examine the Company&#8217;s tax
      position. In addition, the reserves may be affected by changes in tax laws,
      the
      issuance of new or proposed regulations or the availability of new information
      that impacts a tax exposure item. Reserves associated with income tax
      uncertainties are included in either accrued liabilities or other long-term
      liabilities and are not included as a component of deferred tax assets or
      liabilities. Interest and penalties, where applicable, are included in the
      tax
      reserves. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December&#160;31, 2006, the Company had tax loss carryforwards of
      $1.5&#160;billion. Of the total loss carryforwards, $872.0&#160;million has no
      expiration date and $600.9&#160;million expires from 2007 through 2026. In
      addition, the Company had tax credit carryforwards of $140.1&#160;million
      comprised principally of U.S. foreign tax credits, research and development
      credits and investment tax credits that generally expire between 2015 and 2026.
      </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-113</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(10) Pension and
      Other
      Postretirement Benefit Plans </strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company has noncontributory defined benefit pension plans covering certain
      domestic employees and certain employees in foreign countries, principally
      Canada. The Company&#8217;s salaried pension plans provide benefits based on final
      average earnings formulas. The Company&#8217;s hourly pension plans provide benefits
      under flat benefit and cash balance formulas. The Company also has contractual
      arrangements with certain employees which provide for supplemental retirement
      benefits. In general, the Company&#8217;s policy is to fund its pension benefit
      obligation based on legal requirements, tax considerations and local practices.
      </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company has postretirement benefit plans covering a portion of the Company&#8217;s
      domestic and Canadian employees. The Company&#8217;s postretirement benefit plans
      generally provide for the continuation of medical benefits for all eligible
      employees who complete ten years of service after age 45 and retire from the
      Company at age 55 or older. The Company does not fund its postretirement benefit
      obligation. Rather, payments are made as costs are incurred by covered retirees.
      </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Obligations and
      Funded Status </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      reconciliation of the change in benefit obligation, the change in plan assets
      and the net amount recognized in the consolidated balance sheets is shown below
      (based on a September&#160;30 measurement date, in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="284">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="28">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="379">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="11" valign="bottom" width="221" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="379">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="5" valign="bottom" width="99" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pension</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="5" valign="bottom" width="104" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other
                Postretirement</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="379">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="379">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in benefit obligation:</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Benefit
                obligation at beginning of
                year&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">788.3</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">630.8</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">265.5</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">222.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Service
                cost</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">50.3</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">41.0</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">12.7</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">11.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                cost</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">44.2</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">37.6</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">15.0</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">13.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amendments</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">3.5</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">5.6</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">(1.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Actuarial
                (gain) loss</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">(30.5</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">96.0</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">(16.3</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">22.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Benefits
                paid</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">(24.9</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">(21.6</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">(9.1</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">(7.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Curtailment
                (gain) loss</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">(4.6</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">(1.7</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">0.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Special
                termination benefits</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">1.7</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">0.1</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">0.4</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">0.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Settlements</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">(1.5</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Acquisitions,
                new plans and other</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">22.5</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">0.5</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Translation
                adjustment</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="33" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">10.4</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="33" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.5</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="33" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(0.3</div>
            </td>
            <td valign="bottom" width="18" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Benefit
                obligation at end of year</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">860.9</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">788.3</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">267.9</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">265.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 5.35pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-114</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(10) Pension and
      Other Postretirement Benefit Plans &#8211; (continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="286">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="26">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="26">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="26">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="26">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="382">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="11" valign="bottom" width="220" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="382">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="101" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pension</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="101" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other
                Postretirement</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="382">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="382">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in plan assets:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Fair
                value of plan assets at beginning of
                year&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">474.2</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">394.5</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Actual
                return on plan assets</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">42.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">45.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Employer
                contributions</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">69.5</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">48.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">9.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">7.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Benefits
                paid</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(24.9</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(21.6</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(9.1</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(7.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt" align="right">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Settlements</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(1.5</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Acquisitions,
                new plans and other</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">11.5</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">0.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Translation
                adjustment</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Fair
                value of plan assets at end of year</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">573.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">474.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Funded
                status</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(287.3</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(314.1</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(267.9</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(265.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt" align="right">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Contributions
                between September&#160;30 and December&#160;31</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">11.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">15.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="382">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(275.4</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(298.3</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(265.8</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(263.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt" align="right">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Unrecognized
                net actuarial loss</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">182.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">111.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Unrecognized
                net transition (asset) obligation</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(0.2</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">8.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Unrecognized
                prior service cost (credit)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">50.5</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(37.1</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt" align="right">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                amount recognized</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(275.4</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(65.1</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(265.8</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(180.6</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt" align="right">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amounts
                recognized in the consolidated balance sheets:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accrued
                liabilities</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(4.9</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(19.8</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(10.0</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(7.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt" align="right">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                long-term liabilities</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(270.5</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(208.8</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(255.8</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">(173.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt" align="right">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                long-term assets (intangible asset)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">48.5</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accumulated
                other comprehensive loss</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">115.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="382">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                amount recognized</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(275.4</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(65.1</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(265.8</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(180.6</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt" align="right">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December&#160;31, 2006 and 2005, the accumulated benefit obligation for all of
      the Company&#8217;s pension plans was $766.2&#160;million and $697.2&#160;million,
      respectively. As of December&#160;31, 2006, the majority of the Company&#8217;s
      pension plans had accumulated benefit obligations in excess of plan assets.
      As
      of December&#160;31, 2005, all of the Company&#8217;s pension plans had accumulated
      benefit obligations in excess of plan assets. The projected benefit obligation,
      the accumulated benefit obligation and the fair value of plan assets of pension
      plans with accumulated benefit obligations in excess of plan assets were
      $860.4&#160;million, $765.9&#160;million and $573.3&#160;million, respectively,
      as of December&#160;31, 2006, and $788.3&#160;million, $697.2&#160;million and
      $474.2&#160;million, respectively, as of December&#160;31, 2005. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-115</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(10) Pension and
      Other Postretirement Benefit Plans &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>New Accounting
      Pronouncement</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      Financial Accounting Standards Board (&#8220;FASB&#8221;) issued SFAS No. 158, &#8220;Employers&#8217;
Accounting for Defined Benefit Pension and Other Postretirement Plans &#8212; an
      amendment of FASB Statements No. 87, 88, 106, and 132(R).&#8221; This statement
      requires recognition of the funded status of a company&#8217;s defined benefit pension
      and postretirement benefit plans as an asset or liability on the balance sheet.
      Previously, under the provisions of SFAS No. 87, &#8220;Employers&#8217; Accounting for
      Pensions,&#8221; and SFAS No. 106, &#8220;Employers&#8217; Accounting for Postretirement Benefits
      Other Than Pensions,&#8221; the asset or liability recorded on the balance sheet
      reflected the funded status of the plan, net of certain unrecognized items
      that
      qualified for delayed income statement recognition. Under SFAS <br>No. 158,
      these previously unrecognized items are to be recorded in accumulated other
      comprehensive loss when the recognition provisions are adopted. The Company
      adopted the recognition provisions as of December&#160;31, 2006, and the funded
      status of its defined benefit plans is reflected in its consolidated balance
      sheet as of December&#160;31, 2006. In accordance with the transition provisions
      of SFAS No. 158, prior periods have not been restated. The incremental effect
      of
      applying the recognition provisions of SFAS No. 158 on the Company&#8217;s
      consolidated balance sheet as of December&#160;31, 2006, is shown below (in
      millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="284">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="39">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="36">
            </td>
            <td width="15">
            </td>
            <td width="7">
            </td>
            <td width="39">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="379">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Before<br>Adoption
                of<br>SFAS No.
                158</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Adjustments</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="63" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>After<br>Adoption
                of<br>SFAS No.
                158</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="379">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="48">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intangible
                assets (other long-term
                assets)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">45.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">(45.7</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160; </div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Liability
                for defined benefit plan obligations (current and<br>long-term
                liabilities)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(420.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">(120.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(541.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="379">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accumulated
                other comprehensive loss &#8212; (stockholders&#8217; equity)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">97.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">166.6</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">264.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">See Note
      16, &#8220;Accounting Pronouncements,&#8221; for a discussion of other provisions of SFAS
      No. 158 that have not yet been adopted by the Company. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Accumulated Other
      Comprehensive Loss </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Amounts
      recorded in accumulated other comprehensive loss not yet recognized in net
      periodic benefit cost as of December&#160;31, 2006, are shown below: </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="360">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="22">
            </td>
            <td width="12">
            </td>
            <td width="9">
            </td>
            <td width="41">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="481">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pension</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="68" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other<br>Postretirement</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="481">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="481">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                actuarial
                loss&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">150.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">91.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="481">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                transition (asset) obligation</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">(0.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">7.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="481">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Prior
                service cost (credit)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">47.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(33.3</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="481">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">197.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="13" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">66.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Amounts
      recorded in accumulated other comprehensive loss that are expected to be
      recognized as components of net periodic benefit cost in the year ended
      December&#160;31, 2007, are shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="361">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="20">
            </td>
            <td width="12">
            </td>
            <td width="12">
            </td>
            <td width="38">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="482">
              <div style="FONT-SIZE: 12pt; MARGIN: 0pt; LINE-HEIGHT: 14pt" align="center">&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pension</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="68" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other<br>Postretirement</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="482">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="482">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                of actuarial
                loss&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">3.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">4.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="482">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                of net transition (asset) obligation</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">(0.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">1.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="482">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                of prior service cost (credit)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="27" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(3.5</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="482">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 8pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-116</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(10) Pension and
      Other Postretirement Benefit Plans &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Net Periodic
      Benefit Cost </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      components of the Company&#8217;s net periodic benefit cost are shown below (in
      millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="215">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="24">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="24">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="24">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="20">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="20">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="20">
            </td>
            <td width="3">
            </td>
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          <tr>
            <td valign="bottom" width="286">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="17" valign="bottom" width="313" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
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                December&#160;31,</strong></div>
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            <td valign="bottom" width="4">&#160;</td>
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          <tr>
            <td valign="bottom" width="286">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="8" valign="bottom" width="157">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pension</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="8" valign="bottom" width="137" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other
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            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="286">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="39" style="border-top: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="19" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="39" style="border-top: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="19" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="39" style="border-top: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="34">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="286">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="27" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="27" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="286">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Service
                cost</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">50.3</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">41.0</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">36.7</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt" align="justify">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt" align="justify">$</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">12.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">11.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">13.1</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="286">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                cost</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">44.2</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">37.6</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">32.2</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">15.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">13.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">12.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="286">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expected
                return on plan assets</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">(39.4</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">(30.2</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">(24.3</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt" align="justify">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="286">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                of actuarial loss</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">7.1</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">3.0</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">2.8</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">5.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">3.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">3.9</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="286">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                of transition (asset) obligation</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">(0.1</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">(0.2</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">(0.3</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt" align="justify">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">1.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">1.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">1.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="286">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                of prior service cost (credit)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">5.4</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">5.4</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">4.3</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">(3.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">(3.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">(2.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">) </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="286">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Special
                termination benefits</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">1.7</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">0.1</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">0.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">0.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">0.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="286">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Settlement
                loss</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">1.0</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">0.5</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right"><strong>&#8212;</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right"><strong>&#8212;</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right"><strong>&#8212;</strong></div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="286">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Curtailment
                (gain) loss</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.9</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.5</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.9</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="27" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="27" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="27" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(7.7</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">) </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="286">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                periodic benefit cost</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">70.1</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">58.1</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">53.9</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="justify">$</div>
            </td>
            <td valign="bottom" width="27" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">31.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">28.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">20.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Assumptions</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      weighted-average actuarial assumptions used in determining the benefit
      obligation are shown below: </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="308">
            </td>
            <td width="13">
            </td>
            <td width="18">
            </td>
            <td width="21">
            </td>
            <td width="18">
            </td>
            <td width="21">
            </td>
            <td width="18">
            </td>
            <td width="21">
            </td>
            <td width="18">
            </td>
            <td width="8">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="411">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="7" valign="bottom" width="184" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="411">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="3" valign="bottom" width="77">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pension</strong></div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td colspan="3" valign="bottom" width="77" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other<br>Postretirement</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="411">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="24" style="border-top: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="28" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="24" style="border-top: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="411">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="24" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Discount
                rate:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Domestic
                plans&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">6.00</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">5.75</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt">5.90</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">5.70 </div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                plans</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">5.00</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">5.00</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt">5.30</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">5.30 </div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rate
                of compensation increase:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Domestic
                plans</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">3.75</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">3.75</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt">N/A</div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">N/A </div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                plans</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">4.00</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">3.25</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt">N/A</div>
            </td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="24">
              <div style="MARGIN: 0pt" align="right">N/A </div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      weighted-average actuarial assumptions used in determining net periodic benefit
      cost are shown below: </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="174">
            </td>
            <td width="15">
            </td>
            <td width="22">
            </td>
            <td width="26">
            </td>
            <td width="22">
            </td>
            <td width="26">
            </td>
            <td width="22">
            </td>
            <td width="26">
            </td>
            <td width="22">
            </td>
            <td width="26">
            </td>
            <td width="22">
            </td>
            <td width="26">
            </td>
            <td width="22">
            </td>
            <td width="9">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="232">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="11" valign="bottom" width="357" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="232">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="5" valign="bottom" width="161">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pension</strong></div>
            </td>
            <td valign="bottom" width="35">&#160;</td>
            <td colspan="5" valign="bottom" width="160" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other
                Postretirement</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="232">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="29" style="border-top: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="35" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="29" style="border-top: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="35" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-top: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="35" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="29">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="232">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="29" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="30" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="232">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Discount
                rate:</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="232">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Domestic
                plans&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">5.75</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">6.00</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">6.25</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">5.70</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">6.00</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">6.25</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="232">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                plans</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">5.00</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">6.00</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">6.25</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">5.30</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">6.50</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">6.50</div>
            </td>
            <td valign="bottom" width="13">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="232">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expected
                return on plan assets:</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="232">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Domestic
                plans</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">8.25</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">7.75</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">7.75</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="232">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                plans</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">6.90</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">7.00</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">7.00</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="232">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Rate
                of compensation increase:</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="232">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Domestic
                plans</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">3.75</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">3.00</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">3.00</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="232">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                plans</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">3.90</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">3.25</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">3.25</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">N/A</div>
            </td>
            <td valign="bottom" width="13">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 5.35pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-117</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(10) Pension and
      Other Postretirement Benefit Plans &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      expected return on plan assets is determined based on several factors, including
      adjusted historical returns, historical risk premiums for various asset classes
      and target asset allocations within the portfolio. Adjustments made to the
      historical returns are based on recent return experience in the equity and
      fixed
      income markets and the belief that deviations from historical returns are likely
      over the relevant investment horizon. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For
      measurement purposes, domestic healthcare costs were assumed to increase 9%
      in
      2007, grading down over time to 5% in seven years. Foreign healthcare costs
      were
      assumed to increase 7% in 2007, grading down over time to 4% in eleven years
      on
      a weighted average basis. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Assumed
      healthcare cost trend rates have a significant effect on the amounts reported
      for the postretirement benefit plans. A 1% increase in the assumed rate of
      healthcare cost increases each year would increase the postretirement benefit
      obligation as of December&#160;31, 2006, by $59.1&#160;million and increase the
      postretirement net periodic benefit cost by $7.0&#160;million for the year then
      ended. A 1% decrease in the assumed rate of healthcare cost increases each
      year
      would decrease the postretirement benefit obligation as of December&#160;31,
      2006, by $46.2&#160;million and decrease the postretirement net periodic benefit
      cost by $5.4&#160;million for the year then ended. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Plan
      Assets</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      Company&#8217;s pension plan asset allocations by asset category are shown below
      (based on a September&#160;30 measurement date). Pension plan asset allocations
      for the foreign plans relate to the Company&#8217;s Canadian pension plans. </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="390">
            </td>
            <td width="13">
            </td>
            <td width="16">
            </td>
            <td width="21">
            </td>
            <td width="16">
            </td>
            <td width="8">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="520">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="3" valign="bottom" width="74" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="520">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="22">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="22" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="520">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="22" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="520">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                securities:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="520">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Domestic
                plans&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">69</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">71</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="520">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                plans</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">58</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">59</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="520">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Debt
                securities:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="520">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Domestic
                plans</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">28</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">27</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="520">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                plans</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">36</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">38</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="520">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and other:</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="520">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Domestic
                plans</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">3</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">2</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="520">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                plans</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">6</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt" align="right">3</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Company&#8217;s investment policies incorporate an asset allocation strategy that
      emphasizes the long-term growth of capital. The Company believes this strategy
      is consistent with the long-term nature of plan liabilities and ultimate cash
      needs of the plans. For the domestic portfolio, the Company targets an equity
      allocation of 60% &#8211; 80% of plan assets, a fixed income allocation of 15% &#8211; 40%
      and cash allocation of 0% &#8211; 15%. For the foreign portfolio, the Company targets
      an equity allocation of 50% &#8211; 70% of plan assets, a fixed income allocation of
      30% &#8211; 50% and a cash allocation of 0% &#8211; 10%. Differences in the target
      allocations of the domestic and foreign portfolios are reflective of differences
      in the underlying plan liabilities. Diversification within the investment
      portfolios is pursued by asset class and investment management style. The
      investment portfolios are reviewed on a quarterly basis to maintain the desired
      asset allocations, given the market performance of the asset classes and
      investment management styles. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Company utilizes investment management firms to manage these assets in
      accordance with the Company&#8217;s investment policies. Retained investment managers
      are provided investment guidelines that indicate prohibited assets, which
      include commodities contracts, futures contracts, options, venture capital,
      real
      estate and interest-only or principal-only strips. Derivative instruments are
      also prohibited without the specific approval of the Company. Investment
      managers are limited in the maximum size of individual security holdings and
      the
      maximum exposure to any one industry relative to the total portfolio. Fixed
      income managers are provided further investment guidelines that indicate minimum
      credit ratings for debt securities and limitations on weighted average maturity
      and portfolio duration. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-118</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(10) Pension and
      Other Postretirement Benefit Plans &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company evaluates investment manager performance against market indices which
      the Company believes are appropriate to the investment management style for
      which the investment manager has been retained. The Company&#8217;s investment
      policies incorporate an investment goal of aggregate portfolio returns which
      exceed the returns of the appropriate market indices by a reasonable spread
      over
      the relevant investment horizon. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Contributions</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company expects to contribute approximately $60&#160;million to its domestic and
      foreign pension plan asset portfolios in 2007. Contributions to the pension
      plans are consistent with minimum funding requirements of the relevant
      governmental authorities. The Company may make contributions in excess of these
      minimums when the Company believes it is financially advantageous to do so
      and
      based on its other capital requirements. In addition, the Company&#8217;s future
      funding obligations may be affected by changes in applicable legal requirements.
      </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Benefit
      Payments</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">As
      of
      December&#160;31, 2006, the Company&#8217;s estimate of expected benefit payments in
      each of the five succeeding years and in the aggregate for the five years
      thereafter are shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="352">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="13">
            </td>
            <td width="12">
            </td>
            <td width="44">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="470">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pension</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="75" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other<br>Postretirement</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="470">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2007&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">27.1</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">10.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2008</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">29.0</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">10.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2009</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">31.1</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">11.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2010</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">34.8</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">12.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2011</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">37.6</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">12.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="470">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Five
                years thereafter</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">241.9</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">73.5</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Defined
      Contribution and Multi-employer Pension Plans</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company also sponsors defined contribution plans and participates in
      government-sponsored programs in certain foreign countries. Contributions are
      determined as a percentage of each covered employee&#8217;s salary. The Company also
      participates in multi-employer pension plans for certain of its hourly
      employees. Contributions are based on collective bargaining agreements. For
      the
      years ended December&#160;31, 2006, 2005 and 2004, the aggregate cost of the
      defined contribution and multi-employer pension plans was $22.7&#160;million,
      $25.8&#160;million and $25.1&#160;million, respectively. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Subsequent
      Events</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In 2006,
      the Company elected to freeze its U.S. salaried defined benefit pension plan
      effective December&#160;31, 2006. In conjunction with this, the Company
      established a new defined contribution retirement plan for its salaried
      employees effective January&#160;1, 2007. Contributions to this plan will be
      determined as a percentage of each covered employee&#8217;s salary and are expected to
      be in the range of $18&#160;million to $25&#160;million in 2007. Subsequent to
      the measurement date of September&#160;30, 2006, the Company incurred
      curtailment gains of approximately $36.5&#160;million and $14.7&#160;million
      with respect to pension and other postretirement benefit plans, respectively.
      The pension plan curtailment gain resulted from the suspension of the accrual
      of
      defined benefits related to the Company&#8217;s U.S. salaried defined benefit pension
      plan. The other postretirement benefit plan curtailment gain resulted from
      employee terminations associated with a facility closure in the fourth quarter
      of 2006. The Company uses a September&#160;30 measurement date for its U.S.
      pension and other postretirement benefit plans, and as these curtailments
      occurred after the measurement date, the related curtailment gains will be
      recognized by the Company in the first quarter of 2007. </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-119</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(11) Stock-Based
      Compensation</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company has three plans under which it has issued stock options: the 1994 Stock
      Option Plan, the 1996 Stock Option Plan and the Long-Term Stock Incentive Plan.
      Options issued to date under these plans generally vest three years following
      the grant date and expire ten years from the issuance date. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of option transactions during each of the three years in the period
      ended December&#160;31, 2006, is shown below: </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="318">
            </td>
            <td width="14">
            </td>
            <td width="48">
            </td>
            <td width="14">
            </td>
            <td width="73">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="424">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Stock
                Options</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="97" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Price
                Range</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="424">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="64">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="97">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Outstanding
                as of January&#160;1,
                2004&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="64">
              <div style="MARGIN: 0pt" align="right">4,002,625</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="97">
              <div style="MARGIN: 0pt" align="right">$15.50 &#8211; $55.33</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expired
                or cancelled</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="64">
              <div style="MARGIN: 0pt" align="right">(14,450</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="97">
              <div style="MARGIN: 0pt" align="right">$15.50 &#8211; $54.22</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Exercised</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(693,495</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="97">
              <div style="MARGIN: 0pt" align="right">$15.50 &#8211; $54.22</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Outstanding
                as of December&#160;31, 2004</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="64">
              <div style="MARGIN: 0pt" align="right">3,294,680</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="97">
              <div style="MARGIN: 0pt" align="right">$22.12 &#8211; $55.33</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expired
                or cancelled</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="64">
              <div style="MARGIN: 0pt" align="right">(176,800</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="97">
              <div style="MARGIN: 0pt" align="right">$22.12 &#8211; $54.22</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Exercised</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(134,475</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="97">
              <div style="MARGIN: 0pt" align="right">$22.12 &#8211; $54.22</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Outstanding
                as of December&#160;31, 2005</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="64">
              <div style="MARGIN: 0pt" align="right">2,983,405</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="97">
              <div style="MARGIN: 0pt" align="right">$22.12 &#8211; $55.33</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expired
                or cancelled</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="64">
              <div style="MARGIN: 0pt" align="right">(186,100</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="97">
              <div style="MARGIN: 0pt" align="right">$22.12 &#8211; $54.22</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Exercised</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="64" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(7,000</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="97">
              <div style="MARGIN: 0pt" align="right">$22.12</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="424">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Outstanding
                as of December&#160;31, 2006</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="64" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,790,305</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="97">
              <div style="MARGIN: 0pt" align="right">$22.12 &#8211;
$55.33</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of options outstanding as of December&#160;31, 2006, is shown below:
</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="178">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="55">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="55">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="55">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="55">
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="237">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Range
                of exercise
                prices&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">22.12 &#8211; 27.25</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">33.00 &#8211; 39.83</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">41.83 &#8211; 42.32</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">54.22 &#8211; 55.33 </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="237">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Options
                outstanding and exercisable:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="237">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Number
                outstanding and exercisable</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">215,475</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">795,080</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">1,389,300</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">390,450 </div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="237">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Weighted
                average remaining contractual<br>life (years)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">3.16</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">3.56</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">5.42</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">1.56 </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="237">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Weighted
                average exercise price</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">22.58</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">36.98</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">41.83</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="73">
              <div style="MARGIN: 0pt" align="right">54.27
</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December&#160;31, 2005, 2,967,405 options were exercisable. During 2006, an
      additional 16,000 options became exercisable. As of December&#160;31, 2006, all
      outstanding options were exercisable. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Long-Term Stock Incentive Plan also permits the grants of stock appreciation
      rights, restricted stock, restricted stock units, performance shares and
      performance units (collectively, &#8220;Incentive Units&#8221;) to officers and other key
      employees of the Company. As of December&#160;31, 2006, the Company had
      outstanding stock-settled stock appreciation rights covering 1,751,854 shares
      with a weighted average exercise price of $28.99 per right and outstanding
      restricted stock and performance shares convertible into a maximum of 2,134,480
      shares of common stock of the Company. Restricted stock and performance shares
      include 1,285,387 restricted stock units at no cost to the employee, 679,184
      restricted stock units at a weighted average cost to the employee of $40.86
      per
      unit and 169,909 performance shares at no cost to the employee. As of
      December&#160;31, 2006, the Company also had outstanding 463,748 cash-settled
      stock appreciation rights with a weighted average exercise price of $28.74
      per
      right. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Stock
      appreciation rights granted prior to 2006 vest on a graded basis over one to
      three years following the grant date and expire seven years from the grant
      date.
      Stock appreciation rights granted in 2006 vest three years following the grant
      date and expire seven years from the grant date. Restricted stock units granted
      prior to 2006 vest on a graded basis over two to five years following the grant
      date. Restricted stock units granted in 2006 vest on a graded basis over two
      to
      four years following the grant date. Performance shares vest three years
      following the grant date. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-120</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt"><p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(11) Stock-Based
      Compensation &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of Incentive Unit transactions during each of the three years in the
      period ended December&#160;31, 2006, is shown below: </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="292">
            </td>
            <td width="12">
            </td>
            <td width="44">
            </td>
            <td width="12">
            </td>
            <td width="44">
            </td>
            <td width="13">
            </td>
            <td width="44">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="390">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Stock<br>Appreciation<br>Rights(1)</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Restricted<br>Stock<br>Units</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Performance<br>Shares(2)</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="390">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Outstanding
                as of January&#160;1,
                2004&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">1,394,716</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">256,158</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Granted</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">954,637</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">53,193</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expired
                or cancelled</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(39,332</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">(6,664</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Distributed</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(476,337</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(93,660</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Outstanding
                as of December&#160;31, 2004</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">1,833,684</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">209,027</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Granted</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,215,046</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">605,811</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">56,733</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expired
                or cancelled</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(74,528</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">(67,452</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Distributed</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(130,845</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(74,636</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Outstanding
                as of December&#160;31, 2005</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,215,046</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">2,234,122</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">123,672</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Granted</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">642,285</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">406,086</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">130,655</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expired
                or cancelled</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">(91,002</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">(146,045</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">(84,418</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Distributed
                or exercised</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(14,475</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(529,592</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="390">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Outstanding
                as of December&#160;31, 2006</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,751,854</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,964,571</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">169,909</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 13pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">(1)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 2.5pt">Does
      not
      include cash-settled stock appreciation rights. </div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">(2)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 2.5pt">Performance
      shares reflected as &#8220;granted&#8221; are notional shares granted at the beginning of a
      three-year performance period whose eventual payout is subject to satisfaction
      of performance criteria. Performance shares reflected as &#8220;distributed&#8221; are those
      that are paid out in shares of common stock upon satisfaction of the performance
      criteria at the end of the three-year performance period. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December&#160;31, 2005, all outstanding stock appreciation rights were
      nonvested. During 2006, 375,331 stock appreciation rights vested and 360,856
      of
      these remain outstanding as of December&#160;31, 2006. All outstanding
      restricted stock units and performance shares are nonvested. Restricted stock
      units and performance shares are distributed when vested. As of
      December&#160;31, 2006, unrecognized compensation cost related to nonvested
      Incentive Units was $41.9&#160;million. This amount is expected to be recognized
      over the next 1.6 years on a weighted average basis. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The fair
      values of the stock-settled stock appreciation right grants, which have a
      seven-year term, were estimated as of the grant dates using the Black-Scholes
      option pricing model with the following weighted average assumptions: expected
      dividend yields of 0.00% in 2006 and 1.91% in 2005; expected life of 5 years
      in
      2006 and 41/2 years in 2005; risk-free interest rate of 4.58% in 2006 and 4.40%
      in 2005; and expected volatility of 40.00% in 2006 and 2005. The weighted
      average fair value of the stock-settled stock appreciation right grants were
      $13.21 per right in 2006 and $9.30 per right in 2005. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(12) Commitments
      and
      Contingencies</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Legal and Other
      Contingencies </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December&#160;31, 2006 and December&#160;31, 2005, the Company had recorded
      reserves for pending legal disputes, including commercial disputes and other
      matters, of $18.0&#160;million and $49.2&#160;million, respectively. Such
      reserves reflect amounts recognized in accordance with accounting principles
      generally accepted in the United States and typically exclude the cost of legal
      representation. Product warranty liabilities are recorded separately from legal
      liabilities, as described below. </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-121</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(12) Commitments
      and
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Commercial
      Disputes</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company is involved from time to time in legal proceedings and claims,
      including, without limitation, commercial or contractual disputes with its
      suppliers, competitors and customers. These disputes vary in nature and are
      usually resolved by negotiations between the parties. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      January&#160;29, 2002, Seton Company (&#8220;Seton&#8221;), one of the Company&#8217;s leather
      suppliers, filed a suit alleging that the Company had breached a purported
      agreement to purchase leather from Seton for seats for the life of the General
      Motors GMT 800 program. Seton filed the lawsuit in the U.S. District Court
      for
      the Eastern District of Michigan seeking compensatory and exemplary damages
      totaling approximately $96.5&#160;million, plus interest, on breach of contract
      and promissory estoppel claims. In May&#160;2005, this case proceeded to trial,
      and the jury returned a $30.0&#160;million verdict against the Company. On
      September&#160;27, 2005, the Court denied the Company&#8217;s post-trial motions
      challenging the judgment and granted Seton&#8217;s motion to award prejudgment
      interest in the amount of approximately $4.7&#160;million. On October&#160;4,
      2006, the Sixth Circuit Court of Appeals affirmed the judgment of the trial
      court. On October&#160;18, 2006, the Company filed a Petition for Rehearing with
      the court which was denied on November&#160;16, 2006. On December&#160;7, 2006,
      the Court of Appeals issued a mandate indicating that the order affirming the
      judgment was final. In December&#160;2006, the Company paid the principal and
      all remaining interest on the judgment. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      January&#160;26, 2004, the Company filed a patent infringement lawsuit against
      Johnson Controls Inc. and Johnson Controls Interiors LLC (together, &#8220;JCI&#8221;) in
      the U.S. District Court for the Eastern District of Michigan alleging that
      JCI&#8217;s
      garage door opener products infringed certain of the Company&#8217;s radio frequency
      transmitter patents. JCI counterclaimed seeking a declaratory judgment that
      the
      subject patents are invalid and unenforceable, and that JCI is not infringing
      these patents. JCI also has filed motions for summary judgment asserting that
      its garage door opener products do not infringe the Company&#8217;s patents and that
      one of the Company&#8217;s patents is invalid and unenforceable. The Company is
      vigorously pursuing its claims against JCI. A trial date has not been scheduled.
      </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">After
      the
      Company filed its patent infringement action against JCI, affiliates of JCI
      sued
      one of the Company&#8217;s vendors and certain of the vendor&#8217;s employees in Ottawa
      County, Michigan Circuit Court on July&#160;8, 2004, alleging misappropriation
      of trade secrets and disclosure of confidential information. The suit alleges
      that the defendants misappropriated and shared with the Company trade secrets
      involving JCI&#8217;s universal garage door opener product. JCI seeks to enjoin the
      defendants from selling or attempting to sell a competing product, as well
      as
      compensatory damages and attorney fees. The Company is not a defendant in this
      lawsuit; however, the agreements between the Company and the defendants contain
      customary indemnification provisions. The Company does not believe that its
      garage door opener product benefited from any allegedly misappropriated trade
      secrets or technology. However, JCI has sought discovery of certain information
      which the Company believes is confidential and proprietary, and the Company
      has
      intervened in the case as a non-party for the limited purpose of protecting
      its
      rights with respect to JCI&#8217;s discovery efforts. The trial has been rescheduled
      to October&#160;2007. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      June&#160;13, 2005, The Chamberlain Group (&#8220;Chamberlain&#8221;) filed a lawsuit
      against the Company and Ford Motor Company (&#8220;Ford&#8221;) in the Northern District of
      Illinois alleging patent infringement. Two counts were asserted against the
      Company and Ford based upon two Chamberlain rolling-code garage door opener
      system patents. Two additional counts were asserted against Ford only (not
      the
      Company) based upon different Chamberlain patents. The Chamberlain lawsuit
      was
      filed in connection with the marketing of the Company&#8217;s universal garage door
      opener system, which competes with a product offered by JCI. JCI obtained
      technology from Chamberlain to operate its product. In October&#160;2005, JCI
      joined the lawsuit as a plaintiff along with Chamberlain. In October&#160;2006,
      Ford was dismissed from the suit. JCI and Chamberlain have filed a motion for
      a
      preliminary injunction, and the Company is vigorously defending the claims
      asserted in this lawsuit. A trial date has not yet been scheduled. </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-122</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(12) Commitments
      and
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Product Liability Matters
      </i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In the
      event that use of the Company&#8217;s products results in, or is alleged to result in,
      bodily injury and/or property damage or other losses, the Company may be subject
      to product liability lawsuits and other claims. In addition, the Company is
      a
      party to warranty-sharing and other agreements with its customers relating
      to
      its products. These customers may pursue claims against the Company for
      contribution of all or a portion of the amounts sought in connection with
      product liability and warranty claims. The Company can provide no assurances
      that it will not experience material claims in the future or that it will not
      incur significant costs to defend such claims. In addition, if any of the
      Company&#8217;s products are, or are alleged to be, defective, the Company may be
      required or requested by its customers to participate in a recall or other
      corrective action involving such products. Certain of the Company&#8217;s customers
      have asserted claims against the Company for costs related to recalls or other
      corrective actions involving its products. In certain instances, the allegedly
      defective products were supplied by<br>tier II suppliers against whom the
      Company has sought or will seek contribution. In this regard, in the first
      quarter of 2007, the Company received notice of a potential warranty claim
      concerning a component produced by a tier II supplier and incorporated into
      a
      product supplied by the Company. The alleged non-conformity is not
      safety-related. The Company is continuing to work with the customer and the
      tier
      II supplier to evaluate the matter and determine the appropriate corrective
      action, if any. The Company has also placed its tier II supplier on notice
      of
      the potential claim and of the Company&#8217;s intention to seek full contribution and
      reimbursement for any loss. The Company carries insurance for certain legal
      matters, including product liability claims, but such coverage may be limited.
      The Company does not maintain insurance for product warranty or recall matters.
      </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company records product warranty liabilities based on its individual customer
      agreements. Product warranty liabilities are recorded for known warranty issues
      when amounts related to such issues are probable and reasonably estimable.
      In
      certain product liability and warranty matters, the Company may seek recovery
      from its suppliers that supply materials or services included within the
      Company&#8217;s products that are associated with the related claims. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of the changes in product warranty liabilities for each of the two
      years
      in the period ended December&#160;31, 2006, is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="425">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="21">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="567">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of January&#160;1,
                2005&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">43.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="567">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expense,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">16.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="567">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Settlements</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">(26.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="567">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                currency translation and other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="28" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1.7</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="567">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of December&#160;31, 2005</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">32.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="567">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expense,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">17.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="567">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Settlements</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">(12.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="567">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                currency translation and other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="28" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="567">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of December&#160;31, 2006</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="28" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">40.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Environmental
      Matters</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company is subject to local, state, federal and foreign laws, regulations and
      ordinances which govern activities or operations that may have adverse
      environmental effects and which impose liability for clean-up costs resulting
      from past spills, disposals or other releases of hazardous wastes and
      environmental compliance. The Company&#8217;s policy is to comply with all applicable
      environmental laws and to maintain an environmental management program based
      on
      ISO 14001 to ensure compliance. However, the Company currently is, has been
      and
      in the future may become the subject of formal or informal enforcement actions
      or procedures. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-123</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(12) Commitments
      and
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company has been named as a potentially responsible party at several third-party
      landfill sites and is engaged in the cleanup of hazardous waste at certain
      sites
      owned, leased or operated by the Company, including several properties acquired
      in its 1999 acquisition of UT Automotive. Certain present and former properties
      of<br>UT Automotive are subject to environmental liabilities which may be
      significant. The Company obtained agreements and indemnities with respect to
      certain environmental liabilities from UTC in connection with its acquisition
      of
      UT Automotive. UTC manages and directly funds these environmental liabilities
      pursuant to its agreements and indemnities with the Company. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December&#160;31, 2006 and December&#160;31, 2005, the Company had recorded
      reserves for environmental matters of $3.6&#160;million and $3.2&#160;million,
      respectively. While the Company does not believe that the environmental
      liabilities associated with its current and former properties will have a
      material adverse effect on its business, consolidated financial position,
      results of operations or cash flows no assurances can be given in this regard.
      </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">One of
      the Company&#8217;s subsidiaries and certain predecessor companies were named as
      defendants in an action filed by three plaintiffs in August&#160;2001 in the
      Circuit Court of Lowndes County, Mississippi, asserting claims stemming from
      alleged environmental contamination caused by an automobile parts manufacturing
      plant located in Columbus, Mississippi. The plant was acquired by the Company
      as
      part of its acquisition of UT Automotive in May&#160;1999 and sold almost
      immediately thereafter, in June&#160;1999, to Johnson Electric Holdings Limited
      (&#8220;Johnson Electric&#8221;). In December&#160;2002, 61 additional cases were filed by
      approximately 1,000 plaintiffs in the same court against the Company and other
      defendants relating to similar claims. In September&#160;2003, the Company was
      dismissed as a party to these cases. In the first half of 2004, the Company
      was
      named again as a defendant in these same 61 additional cases and was also named
      in five new actions filed by approximately 150 individual plaintiffs related
      to
      alleged environmental contamination from the same facility. The plaintiffs
      in
      these actions are persons who allegedly were either residents and/or owned
      property near the facility or worked at the facility. In November&#160;2004, two
      additional lawsuits were filed by 28 plaintiffs (individuals and organizations),
      alleging property damage as a result of the alleged contamination. Each of
      these
      complaints seeks compensatory and punitive damages. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">All of
      the plaintiffs subsequently dismissed their claims for health effects and
      personal injury damages and the cases proceeded with approximately 280
      plaintiffs alleging property damage claims only. In March&#160;2005, the venue
      for these lawsuits was transferred from Lowndes County, Mississippi, to
      Lafayette County, Mississippi. In April&#160;2005, certain plaintiffs filed an
      amended complaint alleging negligence, nuisance, intentional tort and conspiracy
      claims and seeking compensatory and punitive damages. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In the
      first quarter of 2006, co-defendant UTC entered into a settlement agreement
      with
      the plaintiffs. During the third quarter of 2006, the Company and co-defendant
      Johnson Electric entered into a settlement memorandum with the plaintiffs&#8217;
counsel outlining the terms of a global settlement, including establishing
      the
      requisite percentage of executed settlement agreements and releases that were
      required to be obtained from the individual plaintiffs for a final settlement
      to
      proceed. Since November&#160;2006, the Company has reached a final settlement
      with respect to approximately 85% of the plaintiffs involving an aggregate
      payment of $875,000 and is in the process of attempting to resolve the remaining
      claims. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">UTC,
      the
      former owner of UT Automotive, and Johnson Electric have each sought
      indemnification for losses associated with the Mississippi claims from the
      Company under the respective acquisition agreements, and the Company has claimed
      indemnification from them under the same agreements. In the first quarter of
      2006, UTC filed a lawsuit against the Company in the State of Connecticut
      Superior Court, District of Hartford, seeking declaratory relief and
      indemnification from the Company for the settlement amount, attorney fees,
      costs
      and expenses UTC paid in settling and defending the Columbus, Mississippi
      lawsuits. In the second quarter of 2006, the Company filed a motion to dismiss
      this matter and filed a separate action against UTC and Johnson Electric in
      the
      State of Michigan, Circuit Court for the County of Oakland, seeking declaratory
      relief and indemnification from UTC or Johnson Electric for the settlement
      amount, attorney fees, costs and expenses the Company has paid, or will pay,
      in
      settling and defending the Columbus, Mississippi lawsuits. During the fourth
      quarter of 2006, UTC agreed to dismiss the </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-124</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(12) Commitments
      and
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">lawsuit filed in the State
      of Connecticut Superior Court, District of Hartford and agreed to proceed with
      the lawsuit filed in the State of Michigan, Circuit Court for the County of
      Oakland. During the first quarter of 2007, Johnson Electric and UTC each filed
      counter-claims against the Company seeking declaratory relief and
      indemnification from the Company for the settlement amount, attorney fees,
      costs
      and expenses each has paid or will pay in settling and defending the Columbus,
      Mississippi lawsuits. To date, no company admits to, or has been found to have,
      an obligation to fully defend and indemnify any other. The Company intends
      to
      vigorously pursue its claims against UTC and Johnson Electric and believes
      that
      it is entitled to indemnification from either UTC or Johnson Electric for its
      losses. However, the ultimate outcome of these matters is unknown. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><i>Other Matters</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      January&#160;2004, the Securities and Exchange Commission (the &#8220;SEC&#8221;) commenced
      an informal inquiry into the Company&#8217;s September&#160;2002 amendment of its 2001
      Form 10-K. The amendment was filed to report the Company&#8217;s employment of
      relatives of certain of its directors and officers and certain related party
      transactions. The SEC&#8217;s inquiry does not relate to the Company&#8217;s consolidated
      financial statements. In February&#160;2005, the staff of the SEC informed the
      Company that it proposed to recommend to the SEC that it issue an administrative
      &#8220;cease and desist&#8221; order as a result of the Company&#8217;s failure to disclose the
      related party transactions in question prior to the amendment of its 2001 Form
      10-K. The Company expects to consent to the entry of the order as part of a
      settlement of this matter. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">In
      April&#160;2006, a former employee of the Company filed a purported class action
      lawsuit in the U.S. District Court for the Eastern District of Michigan against
      the Company, members of its Board of Directors, members of its Employee Benefits
      Committee (the &#8220;EBC&#8221;) and certain members of its human resources personnel
      alleging violations of the Employment Retirement Income Security Act (&#8220;ERISA&#8221;)
      with respect to the Company&#8217;s retirement savings plans for salaried and hourly
      employees. In the second quarter of 2006, the Company was served with three
      additional purported class action ERISA lawsuits, each of which contained
      similar allegations against the Company, members of its Board of Directors,
      members of its EBC and certain members of its senior management and its human
      resources personnel. At the end of the second quarter of 2006, the court entered
      an order consolidating these four lawsuits. During the third quarter of 2006,
      plaintiffs filed their consolidated complaint, which alleges breaches of
      fiduciary duties substantially similar to those alleged in the four individually
      filed lawsuits. The consolidated complaint continues to name certain current
      and
      former members of the Board of Directors and the EBC and certain members of
      senior management and adds certain other current and former members of the
      EBC.
      The consolidated complaint generally alleges that the defendants breached their
      fiduciary duties to plan participants in connection with the administration
      of
      the Company&#8217;s retirement savings plans for salaried and hourly employees. The
      fiduciary duty claims are largely based on allegations of breaches of the
      fiduciary duties of prudence and loyalty and of over-concentration of plan
      assets in the Company&#8217;s common stock. The plaintiffs purport to bring these
      claims on behalf of the plans and all persons who were participants in or
      beneficiaries of the plans from October&#160;21, 2004, to the present and seek
      to recover losses allegedly suffered by the plans. The complaints do not specify
      the amount of damages sought. During the fourth quarter of 2006, the defendants
      filed a motion to dismiss all defendants and all counts in the consolidated
      complaint. No determination has been made that a class action can be maintained,
      and there have been no decisions on the merits of the cases. The Company intends
      to vigorously defend the consolidated lawsuit. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Between
      February&#160;9, 2007 and February&#160;21, 2007, certain stockholders filed six
      purported class action lawsuits against the Company, certain members of the
      Company&#8217;s Board of Directors and American Real Estate Partners,&#160;L.P. and
      certain of its affiliates (collectively, &#8220;AREP&#8221;). Three of the lawsuits were
      filed in the Delaware Court of Chancery and have since been consolidated into
      a
      single action. Three of the lawsuits were filed in Michigan Circuit Court.
      The
      class action complaints, which are substantially similar, generally allege
      that
      the Agreement and Plan of Merger (&#8220;Merger Agreement&#8221;) unfairly limits the
      process of selling the Company and that certain members of the Company&#8217;s Board
      of Directors have breached their fiduciary duties in connection with the Merger
      Agreement and have acted with conflicts of interest in approving the Merger
      Agreement. The lawsuits seek to enjoin the merger, to invalidate the Merger
      Agreement and to enjoin the operation of certain provisions of the</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-125</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(12) Commitments
      and
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">Merger Agreement, a
      declaration that certain members of the Company&#8217;s Board of Directors breached
      their fiduciary duties in approving the Merger Agreement and an award of
      unspecified damages or rescission in the event that the proposed merger with
      AREP is completed. On February&#160;23, 2007, the plaintiffs in the consolidated
      Delaware action filed a consolidated amended complaint, a motion for expedited
      proceedings and a motion to preliminarily enjoin the merger contemplated by
      the
      Merger Agreement. The Company believes that the lawsuits are without merit
      and
      intends to defend against them vigorously. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Prior
      to
      the acquisition of UT Automotive from UTC in May&#160;1999, one of the Company&#8217;s
      subsidiaries purchased the stock of a UT Automotive subsidiary. In connection
      with the acquisition, the Company agreed to indemnify UTC for certain matters,
      including tax consequences if the Internal Revenue Service (the &#8220;IRS&#8221;)
      overturned UTC&#8217;s tax treatment of the transaction. On June&#160;28, 2006, this
      matter was settled with the Appeals Office of the IRS. As a result of the IRS
      settlement in the second quarter of 2006, the Company was required to make
      an
      indemnity payment to UTC of $20.5&#160;million. The payment has been recorded as
      an adjustment to the original purchase price and allocated to goodwill in a
      manner consistent with the original purchase price allocation. The amount
      allocated to the Interiors &#8212; Americas unit of $2.9&#160;million was immediately
      written off as this unit&#8217;s goodwill is fully impaired. On September&#160;1,
      2006, the Company entered into a Payment Agreement and Limited Release with
      UTC
      in order to settle its indemnity obligation related to this issue. In connection
      with this agreement, the Company made a payment to UTC in the amount of
      $20.6&#160;million, including interest up to the date of the agreement. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Although
      the Company records reserves for legal, product warranty and environmental
      matters in accordance with SFAS No. 5, &#8220;Accounting for Contingencies,&#8221; the
      outcomes of these matters are inherently uncertain. Actual results may differ
      significantly from current estimates. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company is involved in certain other legal actions and claims arising in the
      ordinary course of business, including, without limitation, commercial disputes,
      intellectual property matters, personal injury claims, tax claims and employment
      matters. Although the outcome of any legal matter cannot be predicted with
      certainty, the Company does not believe that any of these other legal
      proceedings or matters in which the Company is currently involved, either
      individually or in the aggregate, will have a material adverse effect on its
      business, consolidated financial position, results of operations or cash flows.
      </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Employees</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Approximately
      78% of the Company&#8217;s employees are members of industrial trade unions and are
      employed under the terms of collective bargaining agreements. Collective
      bargaining agreements covering approximately 58% of the Company&#8217;s unionized
      workforce of approximately 81,500 employees, including 20% of the Company&#8217;s
      unionized workforce in the United States and Canada, are scheduled to expire
      in
      2007. Management does not anticipate any significant difficulties with respect
      to the agreements as they are renewed. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Lease
      Commitments</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of lease commitments as of December&#160;31, 2006, under non-cancelable
      operating leases with terms exceeding one year is shown below (in millions):
      </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="425">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="24">
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="566">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT:
10.35pt">2007&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">93.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="566">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2008</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">75.6</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="566">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2009</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">65.3</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="566">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2010</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">52.9</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="566">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2011</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="33">
              <div style="MARGIN: 0pt" align="right">43.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="566">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2012
                and thereafter</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="33" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">71.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="566">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="33" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">402.3</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 6.65pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-126</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(12) Commitments
      and
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company previously guaranteed the residual value of certain of its leased
      assets. In October&#160;2006, the residual value guarantees were released in
      conjunction with the expiration of the related leases. The Company was not
      required to make any payments related to these residual value guarantees. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company&#8217;s operating leases cover principally buildings and transportation
      equipment. Rent expense was $133.8&#160;million, $136.1&#160;million and
      $125.0&#160;million for the years ended December&#160;31, 2006, 2005 and 2004,
      respectively. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(13) Segment
      Reporting</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Historically,
      the Company has had three reportable operating segments: seating, electronic
      and
      electrical and interior. The seating segment includes seat systems and
      components thereof. The electronic and electrical segment includes electronic
      products and electrical distribution systems, primarily wire harnesses and
      junction boxes; interior control and entertainment systems; and wireless
      systems. The interior segment includes instrument panels and cockpit systems,
      headliners and overhead systems, door panels, flooring and acoustic systems
      and
      other interior products. See Note 3, &#8220;Divestiture of Interior Business.&#8221; </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Each
      of
      the Company&#8217;s operating segments reports its results from operations and makes
      its requests for capital expenditures directly to the chief operating
      decision-making group. The economic performance of each operating segment is
      driven primarily by automobile production volumes in the geographic regions
      in
      which it operates, as well as by the success of the vehicle platforms for which
      it supplies products. Also, each operating segment operates in the competitive
      tier I automotive supplier environment and is continually working with its
      customers to manage costs and improve quality. The Company&#8217;s manufacturing
      facilities generally use just-in-time manufacturing techniques to produce and
      distribute their automotive interior products. The Company&#8217;s production
      processes generally make use of unskilled labor, dedicated facilities,
      sequential manufacturing processes and commodity raw materials. The Other
      category includes the corporate headquarters, geographic headquarters and the
      elimination of intercompany activities, none of which meets the requirements
      of
      being classified as an operating segment. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      accounting policies of the Company&#8217;s operating segments are the same as those
      described in Note 2, &#8220;Summary of Significant Accounting Policies.&#8221; The Company
      evaluates the performance of its operating segments based primarily on (i)
      revenues from external customers, (ii) income (loss) before goodwill impairment
      charges, loss on divestiture of interior business, interest, other expense,
      provision for income taxes, minority interests in consolidated subsidiaries,
      equity in net (income) loss of affiliates and cumulative effect of a change
      in
      accounting principle (&#8220;segment earnings&#8221;) and (iii) cash flows, being defined as
      segment earnings less capital expenditures plus depreciation and amortization.
      </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of revenues from external customers and other financial information
      by
      reportable operating segment is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="179">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="41">
            </td>
            <td width="14">
            </td>
            <td width="6">
            </td>
            <td width="41">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="41">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="238">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="14" valign="bottom" width="366" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="238">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="62">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Seating</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="63">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Electronic<br>and
                Electrical</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="54">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Interior</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="47">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="238">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="9" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="238">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues
                from external
                customers&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">11,624.8</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">2,996.9</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt" align="justify">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt" align="justify">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">3,217.2</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$ </div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">17,838.9</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="238">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Segment
                earnings(1)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">604.0</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">102.5</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(183.8</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(241.7</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">281.0</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="238">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">167.3</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">110.1</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">93.8</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">21.0</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">392.2</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="238">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
                expenditures</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">161.1</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">77.0</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">98.7</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">10.8</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">347.6</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="238">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                assets</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">4,386.4</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">2,374.5</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">528.3</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">561.3</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">7,850.5</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-127</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(13) Segment
      Reporting &#8211; (continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="204">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="39">
            </td>
            <td width="2">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="272">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="331" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="272">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Seating</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="63">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Electronic<br>and
                Electrical</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Interior</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="41">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><br><strong>Consolidated</strong></div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="272">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="272">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues
                from external
                customers&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">11,035.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">2,956.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">3,097.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">17,089.2</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="272">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Segment
                earnings(1)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">323.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">180.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(191.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(206.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">105.4</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="272">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">150.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">106.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">116.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">20.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">393.4</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="272">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
                expenditures</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">229.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">102.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">190.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">45.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">568.4</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="272">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">3,985.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">2,122.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,506.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">674.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">8,288.4</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="200">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="39">
            </td>
            <td width="2">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="267">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="336" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="267">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Seating</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="63">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Electronic<br>and
                Electrical</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Interior</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><br><strong>Consolidated</strong></div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="267">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="54" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="267">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues
                from external
                customers&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">11,314.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">2,680.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">2,965.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">16,960.0</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="267">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Segment
                earnings(1)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">682.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">210.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">85.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(209.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">768.4</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="267">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">133.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">89.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">108.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">22.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">355.1</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="267">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
                expenditures</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">208.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">116.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">86.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">17.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">429.0</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="267">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">4,172.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">2,122.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">2,403.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,070.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">9,944.4</div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 13pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">(1)
      </div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 2.5pt">See
      definition above. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In 2005,
      the Company changed its allocation of cash and cash equivalents. Cash and cash
      equivalents, previously reflected in the reportable operating segments, has
      been
      reflected in total in &#8220;Other.&#8221; Total assets by reportable operating segment as
      of December&#160;31, 2004, reflect this change. In addition, prior years&#8217;
reportable operating segment information has been reclassified to reflect the
      current organizational structure of the Company. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      year ended December&#160;31, 2006, segment earnings include restructuring
      charges of $39.9&#160;million, $42.6&#160;million, $10.1&#160;million and
      $6.5&#160;million in the seating, electronic and electrical and interior
      segments and in the other category, respectively (Note 5, &#8220;Restructuring&#8221;). In
      addition, 2006 segment earnings include additional fixed asset impairment
      charges of $10.0&#160;million in the interior segment (Note 2, &#8220;Summary of
      Significant Accounting Policies&#8221;). </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      year ended December&#160;31, 2005, segment earnings includes restructuring
      charges of $30.9&#160;million, $30.0&#160;million, $27.9&#160;million and
      $2.0&#160;million in the seating, electronic and electrical and interior
      segments and in the other category, respectively. In addition, 2005 segment
      earnings include additional fixed asset impairment charges of $82.3&#160;million
      in the interior segment. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      year ended December&#160;31, 2004, segment earnings include restructuring
      charges of $7.8&#160;million in the seating segment. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-128</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(13) Segment
      Reporting &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      reconciliation of consolidated income before goodwill impairment charges, loss
      on divestiture of interior business, interest, other expense, provision for
      income taxes, minority interests in consolidated subsidiaries, equity in net
      (income) loss of affiliates and cumulative effect of a change in accounting
      principal to income (loss) before provision for income taxes, minority interests
      in consolidated subsidiaries, equity in net (income) loss of affiliates and
      effect of a change in accounting principle is shown below (in millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="322">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="26">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="26">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="430">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="8" valign="bottom" width="172" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="430">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="42">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="52">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="430">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="430">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Segment
                earnings </div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">522.7</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">312.2</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">978.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="430">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Corporate
                and geographic headquarters and elimination of intercompany<br>activity
                (&#8220;Other&#8221;) </div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(241.7</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(206.8</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(209.7</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="430">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                before goodwill impairment charges, loss on divestiture of
                Interior<br>business, interest, other expense, provision for income taxes,
                minority<br>interests in consolidated subsidiaries, equity in net (income)
                loss of affiliates<br>and cumulative effect of a change in accounting
                principle </div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">281.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">105.4</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">768.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="430">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill
                impairment charges </div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">1,012.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="430">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                on divestiture of Interior business </div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">636.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="430">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense </div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">209.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">183.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">165.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="430">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                expense, net </div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">85.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="430">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) before provision for income taxes, minority interests
                in<br>consolidated subsidiaries and equity in net (income) loss of
                affiliates and<br>cumulative effect of a change in accounting principle
                </div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(653.4</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(1,128.6</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">564.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Revenues
      from external customers and tangible long-lived assets for each of the
      geographic areas in which the Company operates is shown below (in millions):
      </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="308">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="411">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="195" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="411">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="54">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="54">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="411">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues
                from external customers:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">United
                States&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">6,624.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">6,252.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">6,200.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Canada</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,375.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,374.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,317.8</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Germany</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">2,034.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">2,123.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">2,026.0</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Mexico</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,789.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,595.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,475.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                countries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6,015.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5,743.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5,939.8</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="411">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">17,838.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">17,089.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">16,960.0</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="368">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="491">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="115" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="491">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="49">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="491">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Tangible
                long-lived assets:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">United
                States&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">472.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">563.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Canada</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">51.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">50.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Germany</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">161.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">185.1</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Mexico</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">168.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="42">
              <div style="MARGIN: 0pt" align="right">153.9</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                countries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">618.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="42" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">661.8</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,471.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="42" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,614.7</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-129</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(13) Segment
      Reporting &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      substantial majority of the Company&#8217;s consolidated and reportable operating
      segment revenues are from four automotive manufacturing companies, with General
      Motors and Ford and their respective affiliates accounting for 55%, 53% and
      56%
      of the Company&#8217;s net sales in 2006, 2005 and 2004, respectively. Excluding net
      sales to Saab, Volvo, Jaguar and Land Rover, which are affiliates of General
      Motors or Ford, General Motors and Ford accounted for approximately 47%, 44%
      and
      46% of the Company&#8217;s net sales in 2006, 2005 and 2004, respectively. The
      following is a summary of the percentage of revenues from major customers:
      </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="330">
            </td>
            <td width="12">
            </td>
            <td width="21">
            </td>
            <td width="25">
            </td>
            <td width="21">
            </td>
            <td width="25">
            </td>
            <td width="21">
            </td>
            <td width="8">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="440">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="155" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="440">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="28">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="28">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="29" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="440">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="28" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="28" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="440">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">General
                Motors
                Corporation&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">31.9</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">28.3</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt">%&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">31.4</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="440">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Ford
                Motor Company</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">22.6</div>
            </td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">24.7</div>
            </td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">24.1</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="440">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">DaimlerChrysler</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">10.3</div>
            </td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">11.4</div>
            </td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">11.8</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="440">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">BMW</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">7.4</div>
            </td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">7.6</div>
            </td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">7.5</div>
            </td>
            <td valign="bottom" width="11">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      addition, a portion of the Company&#8217;s remaining revenues are from the above
      automotive manufacturing companies through various other automotive suppliers.
      </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(14) Financial
      Instruments</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      carrying values of the Company&#8217;s senior notes vary from their fair values. The
      fair values were determined by reference to quoted market prices of these
      securities. As of December&#160;31, 2006 and 2005, the aggregate carrying value
      of the Company&#8217;s senior notes was $1.4&#160;billion and $1.8&#160;billion,
      respectively, as compared to an estimated fair value of $1.3&#160;billion and
      $1.6&#160;billion, respectively. As of December&#160;31, 2006 and 2005, the
      carrying values of the Company&#8217;s other senior indebtedness and other financial
      instruments approximated their fair values, which were determined based on
      related instruments currently available to the Company for similar borrowings
      with like maturities. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Certain
      of the Company&#8217;s European and Asian subsidiaries periodically factor their
      accounts receivable with financial institutions. Such receivables are factored
      without recourse to the Company and are excluded from accounts receivable in
      the
      consolidated balance sheets. As of December&#160;31, 2006 and December&#160;31,
      2005, the amount of factored receivables was $256.3&#160;million and
      $256.2&#160;million, respectively. The Company cannot provide any assurances
      that these factoring facilities will be available or utilized in the future.
      </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Asset-Backed
      Securitization Facility </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company and several of its U.S. subsidiaries sell certain accounts receivable
      to
      a wholly owned, consolidated, bankruptcy-remote special purpose corporation
      (Lear ASC Corporation) under an asset-backed securitization facility (the &#8220;ABS
      facility&#8221;). In turn, Lear ASC Corporation transfers undivided interests in up to
      $150&#160;million of the receivables to bank-sponsored commercial paper
      conduits. The level of funding utilized under this facility is based on the
      credit ratings of the Company&#8217;s major customers, the level of aggregate accounts
      receivable in a specific month and the Company&#8217;s funding requirements. Should
      the Company&#8217;s major customers experience further reductions in their credit
      ratings, the Company may be unable or choose not to utilize the ABS facility
      in
      the future. Should this occur, the Company would utilize its New Credit
      Agreement to replace the funding currently provided by the ABS facility. In
      addition, the ABS facility providers can elect to discontinue the program in
      the
      event the Company&#8217;s senior secured debt credit rating declines to below B- or B3
      by Standard &amp; Poor&#8217;s Ratings Services or Moody&#8217;s Investors Service,
      respectively. In October&#160;2006, the ABS facility was amended to extend the
      termination date from October&#160;2006 to October&#160;2007. No assurances can
      be given that the ABS facility will be extended upon its maturity. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company retains a subordinated ownership interest in the pool of receivables
      sold to Lear ASC Corporation. This retained interest is recorded at fair value,
      which is generally based on a discounted cash flow analysis. As of
      December&#160;31, 2006, accounts receivable totaling $568.6&#160;million had
      been transferred to Lear ASC </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-130</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(14) Financial
      Instruments &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">Corporation, but no
      undivided interests in the receivables were transferred to the conduits. As
      such, this retained interest is included in accounts receivable in the
      consolidated balance sheet as of December&#160;31, 2006. As of December&#160;31,
      2005, accounts receivable totaling $673.4&#160;million had been transferred to
      Lear ASC Corporation, including $523.4&#160;million of retained interests, which
      serves as credit enhancement for the facility and is included in accounts
      receivable in the consolidated balance sheet as of December&#160;31, 2005, and
      $150.0&#160;million of undivided interests, which was transferred to the
      conduits and is excluded from accounts receivable in the consolidated balance
      sheet as of December&#160;31, 2005. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">During
      the years ended December&#160;31, 2006, 2005 and 2004, the Company and its
      subsidiaries sold to Lear ASC Corporation adjusted accounts receivable totaling
      $4.4&#160;billion, $4.2&#160;billion and $4.7&#160;billion, respectively, under
      the ABS facility and recognized discounts of $8.0&#160;million,
      $4.7&#160;million and $1.4&#160;million, respectively. These discounts are
      included in other expense, net, in the consolidated statements of operations
      for
      the years ended December&#160;31, 2006, 2005 and 2004. The Company continues to
      service the transferred receivables and receives an annual servicing fee of
      1.0%
      of the sold accounts receivable. The conduit investors and Lear ASC Corporation
      have no recourse to the other assets of the Company or its subsidiaries for
      the
      failure of the accounts receivable obligors to pay timely on the accounts
      receivable. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Certain
      cash flows received from and paid to Lear ASC Corporation are shown below (in
      millions): </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="317">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="16">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="2">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="423">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="8" valign="bottom" width="179" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended
                December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="423">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="47">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="47">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2004</strong></div>
            </td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="423">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="3">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from (repayments of)
                securitizations&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(150.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">150.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from collections reinvested in securitizations</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">4,476.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">4,288.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">4,664.4</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="423">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Servicing
                fees received</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">6.1</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">5.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">5.5</div>
            </td>
            <td valign="bottom" width="3">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Under
      the
      provisions of FASB Interpretation (&#8220;FIN&#8221;) No. 46R, &#8220;Consolidation of Variable
      Interest Entities,&#8221; Lear ASC Corporation is a variable interest entity. The
      accounts of this entity have historically been included in the consolidated
      financial statements of the Company, as this entity is a wholly owned subsidiary
      of Lear. In addition, the bank conduits, which purchase undivided interests
      in
      the Company&#8217;s sold accounts receivable, are variable interest entities. Under
      the current ABS facility, the provisions of FIN No. 46R do not require the
      Company to consolidate any of the bank conduits&#8217; assets or liabilities. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Derivative
      Instruments and Hedging Activities </i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company uses derivative financial instruments, including forward foreign
      exchange, futures, option and swap contracts, to manage its exposures to
      fluctuations in foreign exchange rates and interest rates. The use of these
      financial instruments mitigates the Company&#8217;s exposure to these risks with the
      intent of reducing the variability of the Company&#8217;s operating results. The
      Company is not a party to leveraged derivatives. On the date a derivative
      contract is entered into, the Company designates the derivative as either (1)
      a
      hedge of a recognized asset or liability or of an unrecognized firm commitment
      (a fair value hedge), (2) a hedge of a forecasted transaction or of the
      variability of cash flows to be received or paid related to a recognized asset
      or liability (a cash flow hedge) or (3) a hedge of a net investment in a foreign
      operation (a net investment hedge). </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For a
      fair value hedge, both the effective and ineffective portions of the change
      in
      the fair value of the derivative are recorded in earnings and reflected in
      the
      consolidated statement of operations on the same line as the gain or loss on
      the
      hedged item attributable to the hedged risk. For a cash flow hedge, the
      effective portion of the change in the fair value of the derivative is recorded
      in accumulated other comprehensive income (loss) in the consolidated balance
      sheet. When the underlying hedged transaction is realized, the gain or loss
      included in accumulated other comprehensive income (loss) is recorded in
      earnings and reflected in the consolidated statement of operations on the same
      line as the gain or loss on the hedged item attributable to the hedged risk.
      For
      a net investment hedge of a foreign operation, the effective portion of the
      change in the fair value of the derivative is recorded in cumulative translation
      adjustment, which is a component of accumulated other comprehensive income
      </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-131</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(14) Financial
      Instruments &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">&#160;(loss) in the
      consolidated balance sheet. In addition, for both cash flow and net investment
      hedges, changes in the fair value excluded from the Company&#8217;s effectiveness
      assessments and the ineffective portion of changes in the fair value are
      recorded in earnings and reflected in the consolidated statement of operations
      as other expense, net. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company formally documents its hedge relationships, including the identification
      of the hedging instruments and the hedged items, as well as its risk management
      objectives and strategies for undertaking the hedge transaction. Derivatives
      are
      recorded at fair value in other current and long-term assets and other current
      and long-term liabilities in the consolidated balance sheet. This process
      includes linking derivatives that are designated as hedges of specific assets,
      liabilities, firm commitments or forecasted transactions. The Company also
      formally assesses, both at inception and at least quarterly thereafter, whether
      a derivative used in a hedging transaction is highly effective in offsetting
      changes in either the fair value or cash flows of the hedged item. When it
      is
      determined that a derivative ceases to be a highly effective hedge, the Company
      discontinues hedge accounting. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Forward
      foreign exchange, futures and option contracts &#8212; The Company uses forward
      foreign exchange, futures and option contracts to reduce the effect of
      fluctuations in foreign exchange rates on short-term, foreign currency
      denominated intercompany transactions and other known foreign currency
      exposures. Gains and losses on the derivative instruments are intended to offset
      gains and losses on the hedged transaction in an effort to reduce the earnings
      volatility resulting from fluctuations in foreign exchange rates. The principal
      currencies hedged by the Company include the Mexican peso and the Canadian
      dollar, as well as the Euro and other European currencies. Forward foreign
      exchange, futures and option contracts are accounted for as cash flow hedges
      when the hedged item is a forecasted transaction or the variability of cash
      flows to be received or paid related to a recognized asset or liability. As
      of
      December&#160;31, 2006, contracts designated as cash flow hedges with
      $464.9&#160;million of notional amount were outstanding with maturities of less
      than twelve months. As of December&#160;31, 2006, the fair market value of these
      contracts was approximately $15.0&#160;million. As of December&#160;31, 2006,
      other foreign currency derivative contracts that did not qualify for hedge
      accounting had a total notional amount outstanding of $346.7&#160;million. These
      foreign currency derivative contracts consist principally of cash transactions
      between three and thirty days, hedges of intercompany loans and hedges of
      certain other balance sheet exposures. As of December&#160;31, 2006, the fair
      market value of these contracts was approximately $1.6&#160;million. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Interest
      rate swap contracts &#8212; The Company uses interest rate swap contracts to manage
      its exposure to fluctuations in interest rates. Interest rate swap contracts
      which fix the interest payments of certain variable rate debt instruments or
      fix
      the market rate component of anticipated fixed rate debt instruments are
      accounted for as cash flow hedges. Interest rate swap contracts which hedge
      the
      change in fair market value of certain fixed rate debt instruments are accounted
      for as fair value hedges. As of December&#160;31, 2006, contracts representing
      $800.0&#160;million of notional amount were outstanding with maturity dates of
      August&#160;2007 through September&#160;2011. All of these contracts modify the
      variable rate characteristics of the Company&#8217;s variable rate debt instruments,
      which are generally set at three-month LIBOR rates. These contracts convert
      variable rate obligations into fixed rate obligations with a weighted average
      interest rate of 4.902%. The fair market value of all outstanding interest
      rate
      swap contracts is subject to changes in value due to changes in interest rates.
      As of December&#160;31, 2006, the fair market value of these contracts was
      approximately negative $2.7&#160;million. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December&#160;31, 2006 and 2005, net gains of approximately $14.7&#160;million
      and $9.0&#160;million, respectively, related to derivative instruments and
      hedging activities were recorded in accumulated other comprehensive loss. During
      the years ended December&#160;31, 2006, 2005 and 2004, net gains (losses) of
      approximately $(2.2) million, $33.5&#160;million and $(7.4) million,
      respectively, related to the Company&#8217;s hedging activities were reclassified from
      accumulated other comprehensive loss into earnings. During the year ending
      December&#160;31, 2007, the Company expects to reclassify into earnings net
      gains of approximately $16.0&#160;million recorded in accumulated other
      comprehensive loss. Such gains will be reclassified at the time the underlying
      hedged transactions are realized. During the years ended December&#160;31, 2006,
      2005 and 2004, amounts recognized in the consolidated statements of operations
      related to changes in the fair value of cash flow and fair value hedges excluded
      from the effectiveness assessments and the ineffective portion of changes in
      the
      fair value of cash flow and fair value hedges were not material. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-132</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(14) Financial
      Instruments &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Non-U.S.
      dollar financing transactions &#8212; The Company has designated its Euro-denominated
      senior notes (Note 8, &#8220;Long-Term Debt&#8221;) as a net investment hedge of long-term
      investments in its Euro-functional subsidiaries. As of December&#160;31, 2006,
      the amount recorded in accumulated other comprehensive loss related to the
      effective portion of the net investment hedge of foreign operations was
      approximately negative $147.2&#160;million. Such amount will be included in
      accumulated other comprehensive loss until the Company liquidates its related
      net investment in its designated foreign operations. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(15) Quarterly
      Financial Data (unaudited)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="248">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="41">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="331">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="11" valign="bottom" width="270" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Thirteen
                Weeks Ended</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="331">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April&#160;1,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>July&#160;1,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="65">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>September&#160;30,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="331">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="55" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                sales</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">4,678.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">4,810.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">4,069.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">4,280.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gross
                profit</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">219.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">284.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">186.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">237.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill
                impairment charges</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                on divestiture of Interior business</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">28.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">607.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) before cumulative effect of a change in<br>accounting
                principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">15.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(6.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(74.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(645.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">17.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(6.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(74.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(645.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic
                net income (loss) per share before cumulative effect<br>of a change in
                accounting accounting principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">0.22</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(0.10</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(1.10</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(8.90</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic
                net income (loss) per share</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">0.27</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(0.10</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(1.10</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(8.90</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted
                net income (loss) per share before cumulative effect<br>of a change in
                accounting accounting principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">0.22</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(0.10</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(1.10</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(8.90</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="331">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted
                net income (loss) per share</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">0.26</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(0.10</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="55">
              <div style="MARGIN: 0pt" align="right">(1.10</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(8.90</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="238">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="14">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="318">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="11" valign="bottom" width="282" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Thirteen
                Weeks Ended</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="318">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="54">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April&#160;2,<br>2005</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="54">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>July&#160;2,<br>2005</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="54">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>October&#160;1,<br>2005</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,<br>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="318">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="318">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                sales&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">4,286.0</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">4,419.3</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">3,986.6</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">4,397.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="318">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Gross
                profit</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">199.9</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">220.8</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">86.4</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">228.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="318">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill
                impairment charges</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">670.0</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">342.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="318">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income (loss)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">15.6</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(44.4</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(750.1</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(602.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="318">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic
                net income (loss) per share</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">0.23</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(0.66</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(11.17</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(8.97</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="318">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted
                net income (loss) per share</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">0.23</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(0.66</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(11.17</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">(8.97</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(16) Accounting
      Pronouncements</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Inventory
      Costs &#8212; The FASB issued SFAS No. 151, &#8220;Inventory Costs &#8212; an amendment of ARB No.
      43, Chapter 4.&#8221; This statement clarifies the requirement that abnormal
      inventory-related costs be recognized as current-period charges and requires
      that the allocation of fixed production overheads to inventory conversion costs
      be based on the normal capacity of the production facilities. The provisions
      of
      this statement are to be applied prospectively to inventory costs incurred
      during fiscal years beginning after June&#160;15, 2005. The effects of adoption
      were not significant. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">Nonmonetary
      Assets &#8212; The FASB issued SFAS No. 153, &#8220;Exchanges of Nonmonetary Assets &#8212; an
      amendment of APB Opinion No. 29.&#8221; APB Opinion No. 29, in general, requires the
      use of fair value as the measurement basis for exchanges of nonmonetary assets.
      This statement eliminates the exception to the fair value measurement principle
      for nonmonetary exchanges of similar productive assets and replaces it with
      a
      general exception for nonmonetary asset exchanges that lack commercial
      substance. The provisions of this statement are to be applied prospectively
      to
      nonmonetary asset exchanges occurring in fiscal periods beginning after
      June&#160;15, 2005. The effects of adoption were not significant. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-133</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(16) Accounting
      Pronouncements &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Financial
      Instruments &#8212; The FASB issued SFAS No. 155, &#8220;Accounting for Certain Hybrid
      Financial Instruments &#8212; an amendment of FASB Statements No. 133 and 140.&#8221; This
      statement resolves issues related to the application of SFAS No. 133,
&#8220;Accounting for Derivative Instruments and Hedging Activities,&#8221; to beneficial
      interests in securitized assets. The provisions of this statement are to be
      applied prospectively to all financial instruments acquired or issued during
      fiscal years beginning after September&#160;15, 2006. The Company is currently
      evaluating the provisions of this statement but does not expect the effects
      of
      adoption to be significant. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The FASB
      issued SFAS No. 156, &#8220;Accounting for Servicing of Financial Assets &#8212; an
      amendment of FASB Statement No. 140.&#8221; This statement requires that all servicing
      assets and liabilities be initially measured at fair value. The provisions
      of
      this statement are to be applied prospectively to all servicing transactions
      beginning after September&#160;15, 2006. The effects of adoption were not
      significant. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Fair
      Value Measurements &#8212; The FASB issued SFAS No. 157, &#8220;Fair Value Measurements.&#8221;
This statement defines fair value, establishes a framework for measuring fair
      value and expands disclosures about fair value measurements. The provisions
      of
      this statement are to generally be applied prospectively in fiscal years
      beginning after November&#160;15, 2007. The Company is currently evaluating the
      impact of this statement on its financial statements. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Pension
      and Other Postretirement Benefits &#8212; The FASB issued SFAS No. 158, &#8220;Employers&#8217;
Accounting for Defined Benefit Pension and Other Postretirement Plans &#8212; an
      amendment of FASB Statements No. 87, 88, 106 and 132(R).&#8221; The Company adopted
      the funded status recognition provisions of SFAS No. 158 as of December&#160;31,
      2006. For a discussion of the effects of adopting the recognition provisions
      of
      SFAS No. 158, see Note 10, &#8220;Pension and Other Postretirement Benefit Plans.&#8221;
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">This
      statement also requires the measurement of defined benefit plan asset and
      liabilities as of the annual balance sheet date. Currently, the Company measures
      its plan assets and liabilities using an early measurement date of
      September&#160;30, as allowed by the original provisions of SFAS No. 87,
&#8220;Employers&#8217; Accounting for Pensions,&#8221; and SFAS No. 106, &#8220;Employers&#8217; Accounting
      for Postretirement Benefits Other Than Pensions.&#8221; The measurement date
      provisions of SFAS No. 158 are effective for fiscal years ending after
      December&#160;15, 2008. The Company is currently evaluating the measurement date
      provisions of this statement. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Income
      Taxes &#8212; The FASB issued Interpretation (&#8220;FIN&#8221;) No. 48, &#8220;Accounting for
      Uncertainty in Income Taxes &#8212; an interpretation of FASB Statement No. 109.&#8221; FIN
      48 clarifies the accounting for uncertainty in income taxes by establishing
      minimum standards for the recognition and measurement of tax positions taken
      or
      expected to be taken in a tax return. Under the requirements of FIN 48, the
      Company must review all of its uncertain tax positions and make a determination
      as to whether its position is more-likely-than-not to be sustained upon
      examination by regulatory authorities. If a position meets the
      more-likely-than-not criterion, then the related tax benefit is measured based
      on the cumulative probability analysis of the amount that is
      more-likely-than-not to be realized upon ultimate settlement. FIN 48 is
      effective for fiscal years beginning after December&#160;15, 2006. The
      cumulative impact of the initial adoption of FIN 48 will be reported as an
      adjustment to the Company&#8217;s beginning retained deficit balance in 2007. The
      Company is currently evaluating the impact of this interpretation on its
      financial statements. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Financial
      Statement Reporting &#8212; The SEC issued Staff Accounting Bulletin (&#8220;SAB&#8221;) No. 108.
      SAB 108 provides interpretive guidance on how the effects of the carryover
      or
      reversal of prior year misstatements should be considered in quantifying a
      current year misstatement. The interpretive guidance is effective for financial
      statements covering fiscal years ending after November&#160;15, 2006. The effect
      of adoption was not significant. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-134</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(17) Subsequent
      Event</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      February&#160;9, 2007, the Company entered into an Agreement and Plan of Merger
      (the &#8220;Merger Agreement&#8221;) with AREP Car Holdings Corp., a Delaware corporation
      (&#8220;Parent&#8221;), and AREP Car Acquisition Corp., a Delaware corporation and a wholly
      owned subsidiary of Parent (&#8220;Merger Sub&#8221;). Under the terms of the Merger
      Agreement, Merger Sub would be merged with and into the Company, and as a
      result, the Company would continue as the surviving corporation and a wholly
      owned subsidiary of Parent. Parent and Merger Sub are affiliates of Carl C.
      Icahn. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Pursuant
      to the Merger Agreement, as of the effective time of the merger, each issued
      and
      outstanding share of common stock of the Company, other than shares (i) owned
      by
      Parent, Merger Sub or any subsidiary of Parent and (ii) owned by any
      shareholders who are entitled to and who properly exercise appraisal rights
      under Delaware law, will be canceled and automatically converted into the right
      to receive $36.00 in cash, without interest. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Merger Agreement contains provisions pursuant to which the Company may solicit
      alternative acquisition proposals for forty-five days after the date of the
      Merger Agreement (the &#8220;Solicitation Period&#8221;) and receive unsolicited proposals
      thereafter. The Company may terminate the Merger Agreement under certain
      circumstances, including if its board of directors determines in good faith
      that
      it has received a Superior Proposal (as defined in the Merger Agreement) and
      otherwise complies with certain terms of the Merger Agreement. In connection
      with such termination, and in certain other limited circumstances, the Company
      would be required to pay a fee of $85.2&#160;million to Parent plus up to
      $15.0&#160;million of Parent&#8217;s out-of-pocket expenses (including fees and
      expenses of financing sources, counsel, accountants, investment bankers, experts
      and consultants) relating to the Merger Agreement. If such termination is to
      accept a Superior Proposal prior to the end of the Solicitation Period, the
      Company would be required to pay a fee of $73.5&#160;million to Parent plus up
      to $6.0&#160;million of Parent&#8217;s out-of-pocket expenses. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Parent
      has obtained debt financing commitments for the transaction contemplated by
      the
      Merger Agreement. Consummation of the merger is not subject to a financing
      condition, but is subject to other conditions, including receipt of the
      affirmative vote of the holders of a majority of the outstanding shares of
      the
      Company&#8217;s common stock, antitrust approvals and other customary closing
      conditions. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      connection with the execution of the Merger Agreement, the Company entered
      into
      a voting agreement with Icahn Partners LP, Icahn Partners Master Fund LP, Koala
      Holding LLC and High River Limited Partnership. In the aggregate, such holders
      beneficially own approximately 15% of the Company&#8217;s outstanding common stock.
      Pursuant to the voting agreement, such holders agreed to vote in favor of the
      merger and, subject to certain exceptions, not to dispose of any shares of
      common stock prior to consummation of the merger. Such holders have also agreed
      to vote in favor of a Superior Proposal under certain circumstances. In
      addition, American Real Estate Partners, L.P. has provided a limited guaranty
      in
      favor of the Company with respect to the performance by Parent and Merger Sub
      of
      certain payment obligations under the Merger Agreement. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For
      further information regarding the Merger Agreement, please refer to the Merger
      Agreement and certain related documents which are incorporated by reference
      as
      exhibits to this Report. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-135</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
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    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(18) Supplemental
      Guarantor Condensed Consolidating Financial Statements</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="201">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="38">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="38">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="338" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,
                2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="338">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>ASSETS</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Current
                Assets:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">195.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">4.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">302.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">502.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                receivable</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">12.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">243.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">1,750.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">2,006.9</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">15.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">136.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">429.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">581.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">77.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">217.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">133.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">427.8</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">45.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">29.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">295.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">371.4</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                current assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">346.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">631.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,912.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,890.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Long-Term
                Assets:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">230.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">284.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">956.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">1,471.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">454.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">551.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">991.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">1,996.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investments
                in subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">3,691.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">3,257.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(6,948.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">233.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">234.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">491.8</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                long-term assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,610.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,116.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,181.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6,948.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,960.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,957.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,748.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">5,094.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(6,948.6</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7,850.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>LIABILITIES
                AND STOCKHOLDERS&#8217;
EQUITY</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Current
                Liabilities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Short-term
                borrowings</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">39.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">39.3</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable and drafts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">157.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">395.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">1,764.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">2,317.4</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                accrued liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">322.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">145.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">631.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">1,099.3</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">60.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">226.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">119.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">405.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                portion of long-term debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">19.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">25.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                current liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">545.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">767.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,574.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,887.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Long-Term
                Liabilities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">2,413.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">21.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">2,434.5</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">0.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">48.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">48.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intercompany
                accounts, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,193.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">503.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(1,696.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">202.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">176.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">499.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">878.2</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                long-term liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,809.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">679.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,127.8</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,361.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Stockholders&#8217;
                Equity</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">602.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,300.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,647.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6,948.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">602.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,957.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,748.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">5,094.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(6,948.6</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7,850.5</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-136</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(18) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="201">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="38">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="38">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="338" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,
                2005</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="338">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="center"><strong>ASSETS</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Current
                Assets:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Cash
                and cash equivalents</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">38.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">4.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">153.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">197.3</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Accounts
                receivable</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">46.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">208.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">1,745.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2,000.1</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Inventories</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">24.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">176.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">394.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">595.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Current
                assets of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">228.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">264.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">114.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">607.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">151.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">68.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">225.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">445.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">489.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">723.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2,633.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">3,846.4</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Long-Term
                Assets</strong>:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Property,
                plant and equipment, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">216.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">479.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">918.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">1,614.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Goodwill,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">454.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">536.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">948.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">1,939.8</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Long-term
                assets of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">108.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">267.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">109.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">485.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Investments
                in subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">3,274.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2,895.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">(6,169.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">104.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">26.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">270.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">402.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                long-term assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">4,158.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">4,205.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2,246.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">(6,169.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">4,442.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">4,648.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">4,928.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">4,880.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">(6,169.0</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">8,288.4</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="center"><strong>LIABILITIES
                AND STOCKHOLDERS&#8217;
EQUITY</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Current
                Liabilities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Short-term
                borrowings</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">23.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">23.4</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Accounts
                payable and drafts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">223.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">560.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">1,732.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2,516.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Other
                accrued liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">238.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">161.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">608.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">1,008.6</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Current
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">169.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">275.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">104.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">549.3</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Current
                portion of long-term debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">5.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">9.4</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">633.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">999.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2,474.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">4,106.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Long-Term
                Liabilities<i>:</i></strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2,194.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">8.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">40.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2,243.1</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Long-term
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">0.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">27.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">27.6</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Intercompany
                accounts, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">410.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">1,012.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">(1,422.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">298.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">157.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">343.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">800.0</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                long-term liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2,903.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">1,178.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">(1,011.7</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">3,070.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="269">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt"><strong>Stockholders&#8217;
                Equity</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">1,111.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">2,750.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">3,418.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">(6,169.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">1,111.0</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="269">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">4,648.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">4,928.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">4,880.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">(6,169.0</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt" align="right">8,288.4</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-137</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(18) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="195">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="38">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="39">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="260">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="342" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended December&#160;31,
                2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="260">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="260">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="342">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                sales</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,580.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">6,889.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">12,729.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(3,360.6</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">17,838.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cost
                of sales</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,691.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">6,755.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">11,824.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(3,360.6</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">16,911.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Selling,
                general and administrative expenses</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">240.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">75.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">331.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">646.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill
                impairment charges</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                on divestiture of Interior business</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">240.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">259.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">136.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">636.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                (income) expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(114.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">126.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">198.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">209.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intercompany
                (income) expense, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(281.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">77.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">203.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                expense, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">48.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">85.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) before provision (benefit) for<br>income taxes, minority interests
                in<br>consolidated subsidiaries and equity in net<br>(income) loss of
                affiliates and subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(224.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(455.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">26.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(653.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Provision
                (benefit) for income taxes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">5.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(67.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">116.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">54.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests in consolidated subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">18.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">18.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in net (income) loss of affiliates</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(12.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(5.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">1.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(16.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in net (income) loss of subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">493.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(80.1</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(413.5</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                before cumulative effect of a change in<br>accounting principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(710.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(302.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(110.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">413.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(710.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cumulative
                effect of a change in accounting<br>principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                loss</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(707.5</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(302.9</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(110.6</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">413.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(707.5</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-138</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(18) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="191">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="38">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="39">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="255">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="347" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended December&#160;31,
                2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="255">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="255">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="347">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                sales</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">1,657.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">6,599.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">11,350.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(2,517.1</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">17,089.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cost
                of sales</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">1,727.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">6,568.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">10,574.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(2,517.1</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">16,353.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Selling,
                general and administrative expenses</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">309.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">2.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">318.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">630.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill
                impairment charges</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">1,012.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">1.012.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">45.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">94.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">43.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">183.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intercompany
                (income) expense, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(373.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">308.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">65.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                expense, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">19.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">12.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                (loss) before provision (benefit) for<br>income taxes, minority interests
                in consolidated<br>subsidiaries and equity in net (income) loss
                of<br>affiliates and subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(58.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(1,406.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">336.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(1,128.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Provision
                (benefit) for income taxes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">270.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(140.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">64.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">194.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests in consolidated subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">7.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">7.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in net (income) loss of affiliates</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">40.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">(3.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="46">
              <div style="MARGIN: 0pt" align="right">14.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">51.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in net (income) loss of subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,012.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(193.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(818.4</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income (loss)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(1,381.5</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(1,068.8</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="46" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">250.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">818.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(1,381.5</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-139</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(18) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="194">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="37">
            </td>
            <td width="15">
            </td>
            <td width="5">
            </td>
            <td width="39">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="259">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="343" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended December&#160;31,
                2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="259">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="259">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="343">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                sales</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,652.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">6,937.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">10,990.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(2,620.1</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">16,960.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cost
                of sales</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,739.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">6,270.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">10,168.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(2,620.1</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">15,557.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Selling,
                general and administrative expenses</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">205.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">129.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">298.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">633.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">30.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">100.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">34.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">165.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intercompany
                (income) expense, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(317.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">339.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(22.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                (income) expense, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(17.8</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">29.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">26.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                before provision (benefit) for income<br>taxes, minority interests in
                consolidated<br>subsidiaries and equity in net (income) loss<br>of
                affiliates and subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">11.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">68.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">483.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">564.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Provision
                (benefit) for income taxes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(17.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">25.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">120.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">128.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Minority
                interests in consolidated subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">16.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">16.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in net (income) loss of affiliates</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">0.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(3.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">0.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(2.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in net income of subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(392.9</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(305.8</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">698.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="259">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">422.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">352.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">346.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(698.7</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">422.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-140</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(18) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="191">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="33">
            </td>
            <td width="15">
            </td>
            <td width="6">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="14">
            </td>
            <td width="29">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="39">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="255">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="347" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended December&#160;31,
                2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="255">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="255">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="347">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                Cash Provided by Operating Activities</strong></div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">28.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(102.0</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">358.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">285.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255" style="border-top: #ffffff 0.5pt solid;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
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            <td valign="bottom" width="16" style="border-top: #ffffff 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16" style="border-top: #ffffff 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
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          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Additions
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            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(47.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(94.8</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(205.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(347.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cost
                of acquisitions, net of cash acquired</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(24.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(5.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(30.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds from disposition of businesses and other assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1.4</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">22.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">44.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">65.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash used in investing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(49.2</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(97.2</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(165.8</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(312.2</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Financing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Issuance
                of senior notes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">900.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">900.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Repayment
                of senior notes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(1,356.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(1,356.9</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Primary
                credit facility borrowings, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">597.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">597.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                long-term debt repayments, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(44.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(10.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">18.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(36.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Short-term
                debt repayments, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(11.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(11.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in intercompany accounts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(102.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">192.6</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(90.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds from the sale of common stock</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">199.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">199.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Dividends
                paid</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(16.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(16.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from exercise of stock options</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">0.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">0.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Increase
                in drafts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(2.3</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash provided by financing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">177.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">179.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(79.9</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">277.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Effect
                of foreign currency translation</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">18.6</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">36.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">54.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                Change in Cash and Cash Equivalents</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">157.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(0.8</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">149.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">305.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents at Beginning of Year</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">153.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">197.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="255">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents at End of Year</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">195.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4.0</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">302.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">&#8212; </div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">502.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-141</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(18) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="196">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="15">
            </td>
            <td width="6">
            </td>
            <td width="33">
            </td>
            <td width="15">
            </td>
            <td width="6">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="14">
            </td>
            <td width="29">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="37">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="261">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="341" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended December&#160;31,
                2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="261">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="261">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="341">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                Cash Provided by Operating Activities</strong></div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(260.7</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(15.8</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">837.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">560.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Investing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Additions
                to property, plant and equipment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(123.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(235.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(209.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(568.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cost
                of acquisitions, net of cash acquired</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(11.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(11.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds from disposition of businesses<br>and other assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">7.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">16.1</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">9.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">33.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.9</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.6</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash used in investing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(113.3</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(219.2</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(209.1</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(541.6</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Financing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Repayment
                of senior notes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(600.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(600.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Primary
                credit facility borrowings, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">400.0</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">400.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                long-term debt repayments, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(17.7</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(2.2</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(12.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(32.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Short-term
                debt repayments, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(23.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(23.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in intercompany accounts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">601.1</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">234.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(835.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Dividends
                paid</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(67.2</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(67.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from exercise of stock options</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">4.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">4.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Repurchase
                of common stock</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(25.4</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(25.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Decrease
                in drafts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(7.1</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">1.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">2.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(3.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash used in financing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">289.1</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">233.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(869.9</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(347.0</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Effect
                of foreign currency translation</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(62.0</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(59.8</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                Change in Cash and Cash Equivalents</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(84.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">1.0</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(303.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(387.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents at Beginning<br>of Year</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">123.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">457.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">584.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="261">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents at End of Year</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">38.6</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">153.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">197.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-142</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(18) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="202">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="14">
            </td>
            <td width="29">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="37">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="270">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="332" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Year Ended December&#160;31,
                2004</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="270">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="270">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="332">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                Cash Provided by Operating Activities</strong></div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">100.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">64.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">510.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">675.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Investing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Additions
                to property, plant and equipment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(71.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(146.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(211.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(429.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cost
                of acquisitions, net of cash acquired</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(14.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(3.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(85.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(103.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                proceeds from disposition of businesses and<br>other assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">15.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">13.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">27.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">56.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash used in investing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(69.6</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(136.2</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(266.7</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(472.5</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Financing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Issuance
                of senior notes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">399.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">399.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                long-term debt repayments, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(11.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">1.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(39.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(49.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Short-term
                debt repayments, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(0.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(0.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(29.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(29.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in intercompany accounts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(189.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">66.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">122.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Dividends
                paid</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(68.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(68.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from exercise of stock options</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">24.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">24.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Repurchase
                of common stock</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(97.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(97.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Decrease
                in drafts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6.1</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(5.3</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1.2</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(12.6</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                cash provided by financing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">51.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">61.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">53.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">166.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Effect
                of foreign currency translation</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">41.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">46.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                Change in Cash and Cash Equivalents</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">82.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(5.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">338.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">415.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents at Beginning<br>of Year</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">41.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">118.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">169.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents at End of Year</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">123.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">3.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">457.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">584.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Basis
      of
      Presentation &#8212; Certain of the Company&#8217;s wholly owned subsidiaries (the
&#8220;Guarantors&#8221;) have unconditionally fully guaranteed, on a joint and several
      basis, the punctual payment when due, whether at stated maturity, by
      acceleration or otherwise, of all of the Company&#8217;s obligations under the New
      Credit Agreement and the indentures governing the Company&#8217;s senior notes,
      including the Company&#8217;s obligations to pay principal, premium, if any, and
      interest with respect to the senior notes. The senior notes consist of
      $300&#160;million aggregate principal amount of 8.50% senior notes due 2013,
      $600&#160;million aggregate principal amount of 8.75% senior notes due 2016,
      $399&#160;million aggregate principal amount of 5.75% senior notes due 2014,
      $4&#160;million aggregate principal amount of zero-coupon convertible senior
      notes due 2022, Euro 56&#160;million aggregate principal amount of 8.125% senior
      notes due 2008 and $41&#160;million aggregate principal amount of 8.11% senior
      notes due 2009. The Guarantors under the indentures are currently Lear
      Automotive Dearborn, Inc., Lear Automotive (EEDS) Spain S.L., Lear Corporation
      EEDS and Interiors, Lear Corporation (Germany) Ltd., Lear Corporation Mexico,
      S.
      de R.L. de C.V., Lear Operations Corporation and Lear Seating Holdings Corp.
      #50. Lear Automotive Dearborn, Inc. became a Guarantor under the indentures
      effective April&#160;25, 2006. In lieu of providing separate audited financial
      statements for the Guarantors, the Company has included the audited supplemental
      guarantor condensed consolidating financial statements above. These financial
      statements reflect the guarantors listed above for all periods presented.
      Management does not believe that separate financial statements of the Guarantors
      are material to investors. Therefore, separate financial statements and other
      disclosures concerning the Guarantors are not presented. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      and
      for the years ended December&#160;31, 2005 and 2004, the supplemental guarantor
      condensed consolidating financial statements have been restated to reflect
      certain changes to the equity investments of the guarantor subsidiaries. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Distributions
      &#8212; There are no significant restrictions on the ability of the Guarantors to make
      distributions to the Company. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-143</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(18) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Selling,
      General and Administrative Expenses &#8212; During 2006, 2005 and 2004, the Parent
      allocated $50.0&#160;million, $62.3&#160;million and $63.3&#160;million,
      respectively, of corporate selling, general and administrative expenses to
      its
      operating subsidiaries. The allocations were based on various factors, which
      estimate usage of particular corporate functions, and in certain instances,
      other relevant factors, such as the revenues or the number of employees of
      the
      Company&#8217;s subsidiaries. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Long-Term
      Debt of the Parent and the Guarantors &#8212; A summary of long-term debt of the
      Parent and the Guarantors on a combined basis is shown below (in millions):
      </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="367">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="489">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="112" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December&#160;31,</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="489">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="47">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2006</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2005</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="489">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="489">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amended
                and restated primary credit
                facility&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">997.0</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">400.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="489">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Senior
                notes</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">1,417.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">1,795.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="489">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                long-term debt</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">12.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="489">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">2,419.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">2,207.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="489">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Less
                &#8212; current portion</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6.0</div>
            </td>
            <td valign="bottom" width="17" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(4.2</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="489">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,413.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,203.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      obligations of foreign subsidiary borrowers under the New Credit Agreement
      are
      guaranteed by the Parent. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For a
      more detailed description of the above indebtedness, see Note 8, &#8220;Long-Term
      Debt.&#8221; </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      aggregate minimum principal payment requirements on long-term debt of the Parent
      and the Guarantors, including capital lease obligations, in each of the five
      years subsequent to December&#160;31, 2006, are shown below (in millions):
</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="418">
            </td>
            <td width="12">
            </td>
            <td width="8">
            </td>
            <td width="28">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="557" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt"><strong>Year</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Maturities</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="557">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="557">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT:
10.35pt">2007&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">6.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="557">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2008</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">79.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="557">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2009</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">47.2</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="557">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2010</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">6.0</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="557">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">2011</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">6.0</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-144</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
<div style="MARGIN: 0pt" align="center"><strong><a name="f145"></a>LEAR CORPORATION
  AND SUBSIDIARIES </strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>SCHEDULE
      II &#8212; VALUATION AND QUALIFYING
      ACCOUNTS</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="222">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="28">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="27">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="35">
            </td>
            <td width="16">
            </td>
            <td width="5">
            </td>
            <td width="24">
            </td>
            <td width="16">
            </td>
            <td width="6">
            </td>
            <td width="26">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="296">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Balance<br>as
                of<br>Beginning<br>of
                Year</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Additions</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Retirements</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other<br>Changes</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Balance<br>as
                of End<br>of Year</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="296">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="309">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">FOR
                THE YEAR ENDED DECEMBER&#160;31, 2006:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Valuation
                of accounts deducted from related assets:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Allowance
                for doubtful accounts</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">20.4</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">7.7</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(12.2</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">(1.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">14.9</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Reserve
                for unmerchantable inventories</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">85.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">28.4</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(23.3</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">(3.7</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">87.1</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Restructuring
                reserves</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">25.5</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">92.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(75.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">41.9</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Allowance
                for deferred tax assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">478.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">364.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(28.4</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">29.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">843.9</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">609.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">493.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(139.8</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">24.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">987.8</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="296">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">FOR
                THE YEAR ENDED DECEMBER&#160;31, 2005:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Valuation
                of accounts deducted from related assets:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Allowance
                for doubtful accounts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">26.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">12.5</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(15.8</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">(3.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">20.4</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Reserve
                for unmerchantable inventories</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">86.4</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">33.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(23.3</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">(11.2</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">85.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Restructuring
                reserves</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">20.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">86.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(80.3</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">(1.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">25.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Allowance
                for deferred tax assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">277.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">276.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(44.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(31.2</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">478.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">411.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">409.4</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(163.9</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(47.3</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">609.9</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="296">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">FOR
                THE YEAR ENDED DECEMBER&#160;31, 2004:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Valuation
                of accounts deducted from related assets:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Allowance
                for doubtful accounts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">30.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">11.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(16.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">0.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">26.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Reserve
                for unmerchantable inventories</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">55.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">45.5</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(16.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">1.1</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">86.4</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Restructuring
                reserves</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">8.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="37">
              <div style="MARGIN: 0pt" align="right">18.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(6.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="32">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="35">
              <div style="MARGIN: 0pt" align="right">20.9</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="296">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Allowance
                for deferred tax assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">220.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">84.4</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(27.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="32" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">277.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="296">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">315.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="37" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">160.4</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(65.5</div>
            </td>
            <td valign="bottom" width="21" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="32" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="35" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">411.7</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-145</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
<div style="MARGIN: 0pt" align="center"><strong><a name="f146"></a>LEAR CORPORATION
  AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 16pt; MARGIN-BOTTOM: 8pt" align="center"><strong>CONDENSED
      CONSOLIDATED BALANCE SHEETS</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="343">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="13">
            </td>
            <td width="7">
            </td>
            <td width="44">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="458">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ffffff 0.5pt solid;">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="458">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="54">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited)</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="69">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="458">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="5" valign="bottom" width="142">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions, except share data)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="center"><strong>ASSETS</strong></div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Current
                Assets:</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">330.4</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">502.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                receivable</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">2,412.7</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">2,006.9</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">599.0</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">581.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets of business held for sale</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">38.3</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">427.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">317.6</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">371.4</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current assets</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,698.0</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,890.3</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Long-Term
                Assets:</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment, net</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,425.9</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,471.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill,
                net</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">2,006.6</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,996.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">530.5</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">491.8</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                long-term assets</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,963.0</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,960.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">7,661.0</div>
            </td>
            <td valign="bottom" width="18" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">7,850.5</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="center"><strong>LIABILITIES
                AND STOCKHOLDERS&#8217;
EQUITY</strong></div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Current
                Liabilities:</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Short-term
                borrowings</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">11.5</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">39.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable and drafts</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">2,480.3</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">2,317.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accrued
                liabilities</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,152.8</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,099.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities of business held for
                sale&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">16.7</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">405.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                portion of long-term debt</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">26.4</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">25.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="PADDING-LEFT: 30pt; MARGIN: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current liabilities</div>
            </td>
            <td valign="bottom" width="18">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">3,687.7</div>
            </td>
            <td valign="bottom" width="18">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">3,887.3</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Long-Term
                Liabilities:</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">2,431.8</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">2,434.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">21.6</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">48.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">827.4</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">878.2</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                long-term liabilities</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,280.8</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,361.2</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Stockholders&#8217;
                Equity:</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">&#160;</td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Common
                stock, $0.01 par value, 150,000,000 shares authorized;<br>82,166,506
                shares and 81,984,306 shares issued as of March 31, 2007<br>and December
                31, 2006, respectively</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">0.7</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">0.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Additional
                paid-in capital</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,357.3</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,338.1</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Common
                stock held in treasury, 5,508,097 shares as of March 31, 2007,
                and<br>5,732,316 shares as of December 31, 2006, at cost</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(201.9</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">(210.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Retained
                deficit</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(308.0</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">(362.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accumulated
                other comprehensive loss</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(155.6</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(164.1</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="458">
              <div style="PADDING-LEFT: 30pt; MARGIN: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                stockholders&#8217; equity</div>
            </td>
            <td valign="bottom" width="18">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">692.5</div>
            </td>
            <td valign="bottom" width="18">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">602.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="458">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7,661.0</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7,850.5</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br></div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center"><i>The accompanying notes are an integral
      part of these condensed consolidated balance sheets.</i></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-146</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
<div style="MARGIN: 0pt" align="center"><strong><a name="f147"></a>LEAR CORPORATION
  AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 6.65pt" align="center"><strong>CONDENSED
      CONSOLIDATED STATEMENTS OF INCOME</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="368">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="491">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="111" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="491">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April
                1,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ffffff 0.5pt solid;">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="491">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="111">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited;
                in millions,<br>except per share data)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                sales</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">4,406.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">4,678.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Cost
                of sales</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">4,095.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">4,459.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Selling,
                general and administrative expenses</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">126.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">165.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                on divestiture of Interior business</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">25.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">51.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">47.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                (income) expense, net</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">25.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(8.3</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                before provision (benefit) for income taxes and cumulative effect
                of
                a<br>change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">82.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">14.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Provision
                (benefit) for income taxes</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">32.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(0.2</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                before cumulative effect of a change in accounting
                principle&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">49.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">15.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10pt">Cumulative
                effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">Net
                income</div>
            </td>
            <td valign="bottom" width="16">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">49.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">17.9</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic
                net income per share:</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                before cumulative effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">0.65</div>
            </td>
            <td valign="bottom" width="16">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">0.22</div>
            </td>
            <td valign="bottom" width="4">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cumulative
                effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.05</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Basic
                net income per share</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">0.65</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">0.27</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">Diluted
                net
                income per share:</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                before cumulative effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">0.64</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">0.22</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="491">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Cumulative
                effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.04</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="491">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">Diluted
                net income per share</div>
            </td>
            <td valign="bottom" width="16">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">0.64</div>
            </td>
            <td valign="bottom" width="16">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">0.26</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br></div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center"><i>The accompanying notes are an integral
      part of these condensed consolidated statements.</i></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-147</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
<div style="MARGIN: 0pt" align="center"><strong><a name="f148" id="f148"></a>LEAR
  CORPORATION AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 5pt" align="center"><strong>CONDENSED
      CONSOLIDATED STATEMENTS OF CASH
      FLOWS</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="350">
            </td>
            <td width="15">
            </td>
            <td width="7">
            </td>
            <td width="36">
            </td>
            <td width="15">
            </td>
            <td width="6">
            </td>
            <td width="32">
            </td>
            <td width="4">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="467">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td colspan="5" valign="bottom" width="130" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended</strong></div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="467">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April
                1,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="467">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td colspan="5" valign="bottom" width="130">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited;
                in millions)</div>
            </td>
            <td valign="bottom" width="5">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt"><strong>Cash Flows from Operating
                Activities:</strong></div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Net income</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">49.9</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">17.9</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6.3pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Adjustments
                to reconcile net income to net cash provided by (used in)<br>operating
                activities:</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cumulative
                effect of a change in accounting principle</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(2.9</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                on divestiture of Interior business</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">25.6</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">74.5</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">97.8</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                change in recoverable customer engineering and tooling</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">23.8</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">128.6</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                change in working capital items</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(150.4</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(235.8</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                change in sold accounts receivable</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(38.9</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">38.1</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(26.3</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(4.3</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash provided by (used in) operating activities</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(41.8</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">39.4</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt"><strong>Cash
                Flows from Investing Activities:</strong></div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="20">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="5">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Additions to property, plant and
                equipment</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(29.2</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(92.6</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Divestiture of Interior business</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(57.3</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Other, net</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(28.6</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27.9</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="PADDING-LEFT: 23.85pt; MARGIN: 0pt">Net cash used in investing
                activities</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(115.1</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(64.7</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><strong>Cash
                Flows
                from Financing Activities:</strong></div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Long-term debt repayments, net</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(3.6</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(6.1</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Short-term debt repayments, net</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(11.0</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Dividends paid</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(16.8</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Proceeds from exercise of stock options</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">5.7</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Increase (decrease) in drafts</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(13.5</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.1</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="PADDING-LEFT: 23.85pt; MARGIN: 0pt">Net cash used in financing
                activities</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(22.4</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(21.8</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Effect of foreign currency translation</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">7.0</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">10.7</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt"><strong>Net
                Change in Cash and Cash Equivalents</strong></div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(172.3</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(36.4</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt"><strong>Cash and Cash Equivalents as of
                Beginning
                of Period</strong></div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">502.7</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">207.6</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt"><strong>Cash
                and Cash Equivalents as of End of Period</strong></div>
            </td>
            <td valign="bottom" width="20">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">330.4</div>
            </td>
            <td valign="bottom" width="20">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt" align="right">171.2</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #ccffcc 3pt double;">
              <div style="PADDING-LEFT: 18pt; MARGIN: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt"><strong>Changes
                in Working Capital Items:</strong></div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="20">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="5">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Accounts receivable</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(434.2</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(428.2</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Inventories</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(20.6</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">14.0</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Accounts payable</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">224.5</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">103.9</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Accrued liabilities and other</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">79.9</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">74.5</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                change in working capital items</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(150.4</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(235.8</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt"><strong>Supplementary
                Disclosure:</strong></div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="20">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="5">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Cash paid for interest</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">36.9</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">26.6</div>
            </td>
            <td valign="bottom" width="5">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="467">
              <div style="MARGIN: 0pt">Cash paid for income taxes</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">45.7</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">42.9</div>
            </td>
            <td valign="bottom" width="5" style="border-bottom: white 3pt double;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center"><i>The accompanying notes are an integral
      part of these condensed consolidated statements.</i></div>
    <div style="MARGIN-TOP: 5pt; MARGIN-BOTTOM: 0pt" align="center">F-148</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
<div style="MARGIN: 0pt" align="center"><strong><a name="f149"></a>LEAR CORPORATION
  AND SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(1) Basis of
      Presentation</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      condensed consolidated financial statements include the accounts of Lear
      Corporation (&#8220;Lear&#8221; or the &#8220;Parent&#8221;), a Delaware corporation and the wholly
      owned and less than wholly owned subsidiaries controlled by Lear (collectively,
      the &#8220;Company&#8221;). In addition, Lear consolidates variable interest entities in
      which it bears a majority of the risk of the entities&#8217; potential losses or
      stands to gain from a majority of the entities&#8217; expected returns. Investments in
      affiliates in which Lear does not have control, but does have the ability to
      exercise significant influence over operating and financial policies, are
      accounted for under the equity method. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company and its affiliates design and manufacture complete automotive seat
      systems, electrical distribution systems and select electronic products. Through
      the first quarter of 2007, the Company also supplied automotive interior systems
      and components, including instrument panels and cockpit systems, headliners
      and
      overhead systems, door panels and flooring and acoustic systems (Note 3,
&#8220;Divestiture of Interior Business&#8221;). The Company&#8217;s main customers are automotive
      original equipment manufacturers. The Company operates facilities
      worldwide.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Certain
      amounts in the prior period&#8217;s financial statements have been reclassified to
      conform to the presentation used in the quarter ended March 31, 2007.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(2) Merger
      Agreement</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      February 9, 2007, the Company entered into an Agreement and Plan of Merger
      (the
&#8220;Merger Agreement&#8221;) with AREP Car Holdings Corp., a Delaware corporation
      (&#8220;Parent&#8221;), and AREP Car Acquisition Corp., a Delaware corporation and a wholly
      owned subsidiary of Parent (&#8220;Merger Sub&#8221;). Under the terms of the Merger
      Agreement, Merger Sub would be merged with and into the Company, and as a
      result, the Company would continue as the surviving corporation and a wholly
      owned subsidiary of Parent. Parent and Merger Sub are affiliates of Carl C.
      Icahn.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Pursuant
      to the Merger Agreement, as of the effective time of the merger, each issued
      and
      outstanding share of common stock of the Company, other than shares (i) owned
      by
      Parent, Merger Sub or any subsidiary of Parent and (ii) owned by any
      shareholders who are entitled to and who have properly exercised appraisal
      rights under Delaware law, will be canceled and automatically converted into
      the
      right to receive $36.00 in cash, without interest.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Merger Agreement contains provisions pursuant to which the Company was permitted
      to solicit alternative acquisition proposals for forty-five days after the
      date
      of the Merger Agreement (the &#8220;Solicitation Period&#8221;) and continue ongoing
      discussions or negotiations thereafter. The Solicitation Period ended on March
      26, 2007, and no alternative acquisition proposals have been received as of
      the
      date of this Report. The Company may terminate the Merger Agreement under
      certain circumstances, including if its board of directors determines in good
      faith that it has received a Superior Proposal (as defined in the Merger
      Agreement) and otherwise complies with certain terms of the Merger Agreement.
      In
      connection with such termination, and in certain other limited circumstances,
      the Company would be required to pay a fee of $85.2 million to Parent plus
      up to
      $15.0 million of Parent&#8217;s out-of-pocket expenses (including fees and expenses of
      financing sources, counsel, accountants, investment bankers, experts and
      consultants) relating to the Merger Agreement. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Parent
      has obtained debt financing commitments for the transaction contemplated by
      the
      Merger Agreement. Consummation of the merger is not subject to a financing
      condition, but is subject to other conditions, including receipt of the
      affirmative vote of the holders of a majority of the outstanding shares of
      the
      Company&#8217;s common stock, antitrust approvals and other customary closing
      conditions. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      connection with the execution of the Merger Agreement, the Company entered
      into
      a voting agreement with Icahn Partners LP, Icahn Partners Master Fund LP, Koala
      Holding Limited Partnership and High River Limited Partnership. In the
      aggregate, such holders beneficially own approximately 16% of the Company&#8217;s
      outstanding common stock. Pursuant to the voting agreement, such holders agreed
      to vote in favor of the merger and, subject to certain exceptions, not to
      dispose of any shares of common stock prior to consummation of the merger.
      Such
      holders have also agreed to vote in favor of a Superior Proposal under certain
      circumstances. In addition, American Real </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-149</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(2) Merger Agreement
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">Estate Partners, L.P. has
      provided a limited guaranty in favor of the Company with respect to the
      performance by Parent and Merger Sub of certain payment obligations under the
      Merger Agreement.</div>
    <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">If
      presented, the transaction contemplated by the Merger Agreement will be voted
      on
      by shareholders of record as of May 14, 2007, at the Company&#8217;s annual
      stockholders&#8217; meeting, which has been scheduled for June 27, 2007.</div>
    <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">For
      further information regarding the Merger Agreement, please refer to the Merger
      Agreement and certain related documents, which are incorporated by reference
      as
      exhibits to this Report.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(3) Divestiture of
      Interior Business</strong></div>
    <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">On
      March 31, 2007, the Company completed the transfer of substantially all of
      the
      assets of the Company&#8217;s North American interior business (as well as its
      interests in two China joint ventures and $27.4 million of cash) to
      International Automotive Components Group North America, Inc. and International
      Automotive Components Group North America, LLC (together, &#8220;IAC North America&#8221;),
      in exchange for a 25% equity interest in IAC North America and warrants for
      an
      additional 7% of the current outstanding equity of IAC North America. In
      addition, under the terms of the divestiture agreement, the Company has agreed
      to fund up to an additional $40 million to IAC North America, in the event
      that
      IAC North America does not meet certain financial targets in 2007. The legal
      transfer of certain assets included in this transaction is subject to the
      satisfaction of certain post-closing conditions. In connection with this
      transaction, IAC North America assumed the ordinary course liabilities of the
      Company&#8217;s North American interior business, and the Company retained certain
      pre-closing liabilities, including pension and postretirement healthcare
      liabilities incurred through the closing date of the transaction. </div>
    <div style="MARGIN-TOP: 3.35pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 11pt">The
      Company recorded a loss on divestiture of interior business of $606.9 million
      in
      the fourth quarter of 2006 and an additional charge of $29.4 million in the
      first quarter of 2007, including $6.2 million recorded as cost of sales, $2.0
      million recorded as selling, general and administrative expenses and $21.2
      million recorded as loss on divestiture of interior business. Approximately
      $22.5 million of the first quarter 2007 charge represented cash costs. As of
      March 31, 2007, the beneficial ownership interests of certain less than wholly
      owned subsidiaries were transferred to IAC North America, however, as described
      above, the transfer of legal ownership is subject to the satisfaction of certain
      post-closing conditions. Accordingly, these assets and liabilities remain
      classified as held for sale on the Company&#8217;s condensed consolidated balance
      sheet as of March 31, 2007. A summary of the major classes of the assets and
      liabilities of the Company&#8217;s North American interior business that are
      classified as held for sale in the Company&#8217;s condensed consolidated balance
      sheets are shown below (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="221">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="27">
            </td>
            <td width="12">
            </td>
            <td width="8">
            </td>
            <td width="38">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="295">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="295">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="36">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="295">
              <div style="MARGIN: 0pt">Cash and cash equivalents</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">12.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">19.2</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="295">
              <div style="MARGIN: 0pt">Accounts receivable</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">17.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">284.5</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="295">
              <div style="MARGIN: 0pt">Inventories</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">3.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">69.2</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="295">
              <div style="MARGIN: 0pt">Other current
                assets&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">54.9</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="295">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Current
                assets of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">38.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">427.8</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="295">
              <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">Accounts payable
                and
                drafts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">$</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt" align="right">8.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt" align="right">323.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="295">
              <div style="MARGIN: 0pt">Accrued liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">5.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">79.8</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="295">
              <div style="MARGIN: 0pt">Current portion of long-term debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="295">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 12.15pt; MARGIN-BOTTOM: 0pt">Current
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">16.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">405.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="295">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">18.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">19.6</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="295">
              <div style="MARGIN: 0pt">Other long-term liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">28.9</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="295">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 12.15pt; MARGIN-BOTTOM: 0pt">Long-term
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">21.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">48.5</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="295">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">38.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">&#160;</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">454.2</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 2.65pt; MARGIN-BOTTOM: 5.35pt; LINE-HEIGHT: 11pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-150</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(3) Divestiture of
      Interior Business &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company did not account for the divestiture of its North American interior
      business as a discontinued operation due to its continuing involvement with
      IAC
      North America. The Company&#8217;s investment in IAC North America is accounted for
      under the equity method of accounting. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      divestiture of the Company&#8217;s North American interior business substantially
      completes the disposition of the Company&#8217;s interior business. On October 16,
      2006, the Company completed the contribution of substantially all of its
      European interior business to International Automotive Components Group, LLC
      (&#8220;IAC Europe&#8221;), in exchange for a one-third equity interest in IAC Europe. In
      connection with this transaction, the Company recorded a loss on divestiture
      of
      interior business of $33.5 million, of which $4.4 million was recorded in the
      first quarter of 2007 and $29.1 million was recorded in 2006.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(4) Stock-Based
      Compensation</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      January 1, 2006, the Company adopted the provisions of Statement of Financial
      Accounting Standards (&#8220;SFAS&#8221;) No. 123(R), &#8220;Share-Based Payment,&#8221; using the
      modified prospective transition method and recognized income of $2.9 million
      as
      a cumulative effect of a change in accounting principle related to a change
      in
      accounting for forfeitures. There was no income tax effect resulting from this
      adoption. SFAS No. 123(R) requires the estimation of expected forfeitures at
      the
      grant date and the recognition of compensation cost only for those awards
      expected to vest. Previously, the Company accounted for forfeitures as they
      occurred. In the first quarters of 2007 and 2006, there were no outstanding
      unvested awards for which no compensation cost was recognized as the Company
      adopted the fair value recognition provisions of SFAS No. 123, &#8220;Accounting for
      Stock-Based Compensation,&#8221; for all employee awards granted after January 1,
      2003.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(5)
      Restructuring</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In order
      to address unfavorable industry conditions, the Company began to implement
      consolidation and census actions in the second quarter of 2005. These actions
      are part of a comprehensive restructuring strategy intended to (i)&#160;better
      align the Company&#8217;s manufacturing capacity with the changing needs of its
      customers, (ii) eliminate excess capacity and lower the operating costs of
      the
      Company and (iii) streamline the Company&#8217;s organizational structure and
      reposition its business for improved long-term profitability.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company currently expects to incur pretax costs of approximately $300 million,
      in connection with the restructuring actions, although all aspects of the
      restructuring actions have not been finalized. Such costs include employee
      termination benefits, asset impairment charges and contract termination costs,
      as well as other incremental costs resulting from the restructuring actions.
      These incremental costs principally include equipment and personnel relocation
      costs. The Company also expects to incur incremental manufacturing inefficiency
      costs at the operating locations impacted by the restructuring actions during
      the related restructuring implementation period. Restructuring costs are
      recognized in the Company&#8217;s consolidated financial statements in accordance with
      accounting principles generally accepted in the United States. Generally,
      charges are recorded as elements of the restructuring strategy are finalized.
      Actual costs recorded in the Company&#8217;s consolidated financial statements may
      vary from current estimates.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      connection with the Company&#8217;s restructuring actions, the Company recorded net
      charges of $13.6 million in the first quarter of 2007, including $11.1 million
      recorded as cost of sales and $2.5 million recorded as selling, general and
      administrative expenses. The first quarter 2007 charges consist of employee
      termination benefits of $24.1 million, fixed asset impairment charges of $0.4
      million, net contract termination costs of $(12.7) million and other costs
      of
      $1.8 million. Employee termination benefits were recorded based on existing
      union and employee contracts, statutory requirements and completed negotiations.
      Asset impairment charges relate to the disposal of machinery and equipment
      with
      carrying values of $0.4 million in excess of related estimated fair values.
      Contract termination costs include lease cancellation costs, the repayment
      of
      various government-sponsored grants and a net pension and other postretirement
      benefit plan curtailment gain of $13.9 million.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-151</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(5) Restructuring
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of the first quarter 2007 restructuring charges, excluding the net
      pension and other postretirement benefit plan curtailment gain of $13.9 million
      is shown below (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="181">
            </td>
            <td width="13">
            </td>
            <td width="15">
            </td>
            <td width="53">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="23">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="22">
            </td>
            <td width="16">
            </td>
            <td width="8">
            </td>
            <td width="26">
            </td>
            <td width="13">
            </td>
            <td width="12">
            </td>
            <td width="43">
            </td>
          </tr>
          <tr>
            <td rowspan="2" valign="bottom" width="241">&#160;</td>
            <td rowspan="2" valign="bottom" width="17">&#160;</td>
            <td colspan="2" rowspan="2" valign="bottom" width="91" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Accrual
                as of<br>December 31, 2006</strong></div>
            </td>
            <td rowspan="2" valign="bottom" width="17">&#160;</td>
            <td colspan="2" rowspan="2" valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007<br>Charges</strong></div>
            </td>
            <td rowspan="2" valign="bottom" width="17">&#160;</td>
            <td colspan="5" valign="bottom" width="104" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>2007<br>Utilization</strong></div>
            </td>
            <td rowspan="2" valign="bottom" width="17">&#160;</td>
            <td colspan="2" rowspan="2" valign="bottom" width="74">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Accrual
                as of<br>March 31, 2007</strong></div>
            </td>
          </tr>
          <tr>
            <td colspan="2" valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Cash</strong></div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td colspan="2" valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-cash</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="241">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="71">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="31">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="16" style="border-top: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="58" style="border-top: #000000 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="241">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Employee
                termination
                benefits&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">36.4</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">24.1</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">(36.9</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">23.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="241">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Asset
                impairments</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">0.4</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(0.4</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="241">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Contract
                termination costs</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="71">
              <div style="MARGIN: 0pt" align="right">3.4</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">1.2</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">(1.4</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="58">
              <div style="MARGIN: 0pt" align="right">3.2</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="241">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                related costs</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="20" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="71" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="31" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1.8</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="29" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1.8</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212; </div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="241">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="20" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="71" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">39.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">27.5</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="29" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(40.1</div>
            </td>
            <td valign="bottom" width="22">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(0.4</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="58" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">26.8</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(6)
      Inventories</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Inventories
      are stated at the lower of cost or market. Cost is determined using the
      first-in, first-out method. Finished goods and work-in-process inventories
      include material, labor and manufacturing overhead costs. A summary of
      inventories is shown below (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="229">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="28">
            </td>
            <td width="12">
            </td>
            <td width="8">
            </td>
            <td width="38">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="306">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="306">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="11">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="306">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Raw
                materials</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">439.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">439.9</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="306">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Work-in-process&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">36.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">35.6</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="306">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Finished
                goods</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">122.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">106.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="306">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">599.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="11" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">581.5</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(7) Property, Plant
      and Equipment </strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Property,
      plant and equipment is stated at cost. Depreciable property is depreciated
      over
      the estimated useful lives of the assets, principally using the straight-line
      method. A summary of property, plant and equipment is shown below (in
      millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="230">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="307">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="307">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="307">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Land</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">132.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">133.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="307">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Buildings
                and
                improvements&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">607.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">559.1</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="307">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Machinery
                and equipment</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">2,024.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">2,081.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="307">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Construction
                in progress</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">22.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">12.0</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="307">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                property, plant and equipment</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">2,786.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">2,785.9</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="307">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                &#8211; accumulated depreciation</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,360.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,314.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="307">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                property, plant and equipment</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,425.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,471.7</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Depreciation
      expense was $73.2 million and $96.6 million in the three months ended March
      31,
      2007 and April&#160;1, 2006, respectively.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Costs
      associated with the repair and maintenance of the Company&#8217;s property, plant and
      equipment are expensed as incurred. Costs associated with improvements which
      extend the life, increase the capacity or improve the efficiency or safety
      of
      the Company&#8217;s property, plant and equipment are capitalized and depreciated over
      the remaining life of the related asset.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-152</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(8)
      Goodwill</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of the changes in the carrying amount of goodwill, by reportable
      operating segment, for the three months ended March 31, 2007, is shown below
      (in
      millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="212">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="9">
            </td>
            <td width="40">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="283">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Seating</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Electronic
                and<br>Electrical</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Total</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="283">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="12">&#160;</td>
            <td valign="bottom" width="54">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="283">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of January 1, 2007</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,060.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="12">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54">
              <div style="MARGIN: 0pt" align="right">936.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,996.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="283">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Foreign
                currency translation and
                other&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">7.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="12" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9.9</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="283">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of March 31, 2007</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">1,068.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="12" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="54" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">938.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,006.6</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(9) Long-Term
      Debt</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of long-term debt and the related weighted average interest rates,
      including the effect of hedging activities described in Note 19, &#8220;Financial
      Instruments,&#8221; is shown below (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="227">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="36">
            </td>
            <td width="12">
            </td>
            <td width="38">
            </td>
            <td width="14">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="36">
            </td>
            <td width="12">
            </td>
            <td width="38">
            </td>
            <td width="14">
            </td>
          </tr>
          <tr>
            <td rowspan="2" valign="bottom" width="303">&#160;</td>
            <td rowspan="2" valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="143" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31, 2007</strong></div>
            </td>
            <td rowspan="2" valign="top" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="143" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31, 2006</strong></div>
            </td>
          </tr>
          <tr>
            <td colspan="2" valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Long-Term<br>Debt</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="70" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Weighted<br>Average<br>Interest
                Rate</strong></div>
            </td>
            <td colspan="2" valign="bottom" width="56" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Long-Term<br>Debt</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="70" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Weighted<br>Average<br>Interest
                Rate</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="303">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="70">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="56">
              <div style="MARGIN: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="70">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="303">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Primary
                Credit Facility</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">997.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">7.49</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">997.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">7.49</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="303">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">8.50%
                Senior Notes, due 2013</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">300.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">8.50</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">300.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">8.50</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="303">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">8.75%
                Senior Notes, due 2016</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">600.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">8.75</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">600.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">8.75</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="303">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">5.75%
                Senior Notes, due 2014</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">399.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">5.635</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">399.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">5.635</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="303">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">8.125%
                Euro-denominated Senior Notes, due 2008</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">74.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">8.125</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">73.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">8.125</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="303">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">8.11%
                Senior Notes, due 2009</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">41.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">8.11</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">41.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">8.11</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="303">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Zero-coupon
                Convertible Senior Notes, due
                2022&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">0.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">4.75</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">3.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">4.75</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="303">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">45.5</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">7.03</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">45.5</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">7.06</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">%</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="303">&#160;</td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">2,458.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">2,460.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="303">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                portion</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(26.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(25.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="303">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,431.8</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#160;</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,434.5</div>
            </td>
            <td valign="bottom" width="16" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
            <td valign="bottom" width="51">&#160;</td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Primary Credit
      Facility</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company&#8217;s Primary Credit Facility consists of an Amended and Restated Credit and
      Guarantee Agreement, which provides for maximum revolving borrowing commitments
      of $1.7 billion and a term loan facility of $1.0 billion. As of March 31, 2007
      and December 31, 2006, the Company had $997.0 million in borrowings outstanding
      under the Primary Credit Facility, all of which were outstanding under the
      term
      loan facility. There were no revolving borrowings outstanding.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company&#8217;s obligations under the Primary Credit Facility are secured by a pledge
      of all or a portion of the capital stock of certain of its subsidiaries,
      including substantially all of its first-tier subsidiaries, and are partially
      secured by a security interest in the Company&#8217;s assets and the assets of certain
      of its domestic subsidiaries. In addition, the Company&#8217;s obligations under the
      Primary Credit Facility are guaranteed, on a joint and several basis, by certain
      of its subsidiaries, which are primarily domestic subsidiaries and all of which
      are directly or indirectly 100% owned by the Company.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Primary Credit Facility contains certain affirmative and negative covenants,
      including (i) limitations on fundamental changes involving the Company or its
      subsidiaries, asset sales and restricted payments, (ii) a limitation on
      indebtedness with a maturity shorter than the term loan facility, (iii) a
      limitation on aggregate subsidiary indebtedness to an amount which is no more
      than 4% of consolidated total assets, (iv) a limitation on aggregate secured
      indebtedness to an amount which is no more than $100 million and (v)
      requirements that the Company </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-153</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(9) Long-Term Debt
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">maintain a leverage ratio
      of
      not more than 4.0 to 1, as of March 31, 2007, with decreases over time and
      an
      interest coverage ratio of not less than 2.50 to 1 with increases over time.
      </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      leverage and interest coverage ratios, as well as the related components of
      their computation, are defined in the Primary Credit Facility. The leverage
      ratio is calculated as the ratio of consolidated indebtedness to consolidated
      operating profit. For the purpose of the covenant calculation, (i) consolidated
      indebtedness is generally defined as reported debt, net of cash and excludes
      transactions related to the Company&#8217;s asset-backed securitization and factoring
      facilities and (ii) consolidated operating profit is generally defined as net
      income excluding income taxes, interest expense, depreciation and amortization
      expense, other income and expense, minority interests in income of subsidiaries
      in excess of net equity earnings in affiliates, certain restructuring and other
      non-recurring charges, extraordinary gains and losses and other specified
      non-cash items. Consolidated operating profit is a non-GAAP financial measure
      that is presented not as a measure of operating results, but rather as a measure
      used to determine covenant compliance under the Company&#8217;s Primary Credit
      Facility. The interest coverage ratio is calculated as the ratio of consolidated
      operating profit to consolidated interest expense. For the purpose of the
      covenant calculation, consolidated interest expense is generally defined as
      interest expense plus any discounts or expenses related to the Company&#8217;s
      asset-backed securitization facility less amortization of deferred finance
      fees
      and interest income. As of March 31, 2007, the Company was in compliance with
      all covenants set forth in the Primary Credit Facility. The Company&#8217;s leverage
      and interest coverage ratios were 2.3 to 1 and 4.6 to 1, respectively. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Reconciliations
      of (i) consolidated indebtedness to reported debt, (ii) consolidated operating
      profit to income before provision for income taxes and (iii) consolidated
      interest expense to reported interest expense are shown below (in
      millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="244">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="325">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="325">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="325">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Consolidated
                indebtedness&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">2,139.3</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="325">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">330.4</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="325">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Reported
                debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,469.7</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 12pt; MARGIN: 0pt">&#160;</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="316">
            </td>
            <td width="12">
            </td>
            <td width="12">
            </td>
            <td width="60">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="421">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="97" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended<br>March 31,
                2007</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="421">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="81">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Consolidated
                operating profit</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="81">
              <div style="MARGIN: 0pt" align="right">266.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="81">
              <div style="MARGIN: 0pt" align="right">(74.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Consolidated
                interest expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="81">
              <div style="MARGIN: 0pt" align="right">(45.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Costs
                related to divestiture of interior business</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="81">
              <div style="MARGIN: 0pt" align="right">(33.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                expense, net (excluding certain amounts related to
                asset-backed<br>securitization facility)</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="81">
              <div style="MARGIN: 0pt" align="right">(26.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Restructuring
                charges</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="81">
              <div style="MARGIN: 0pt" align="right">(15.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                excluded items</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="81">
              <div style="MARGIN: 0pt" align="right">27.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                non-cash items</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="81" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(15.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Income
                before provision for income taxes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="81" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">82.3</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Consolidated
                interest expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="81">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">45.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Certain
                amounts related to asset-backed securitization
                facility&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="81">
              <div style="MARGIN: 0pt" align="right">1.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                of deferred financing fees</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="81">
              <div style="MARGIN: 0pt" align="right">2.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Bank
                facility and other fees</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="81" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="421">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Reported
                interest expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="16" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="81" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">51.5</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 12pt; MARGIN: 0pt">&#160;</div>
    <div style="MARGIN: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-154</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(9) Long-Term Debt
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Primary Credit Facility also contains customary events of default, including
      an
      event of default triggered by a change of control of the Company. The senior
      notes due 2013 and 2016 (having an aggregate principal amount outstanding of
      $900 million as of March 31, 2007) provide holders of the notes the right to
      require the Company to repurchase all or any part of their notes at a purchase
      price equal to 101% of the principal amount, plus accrued and unpaid interest,
      upon a &#8220;change of control&#8221; (as defined in the indenture governing the notes).
      The transaction contemplated by the Merger Agreement with affiliates of American
      Real Estate Partners, L.P. would not constitute a change of control for these
      purposes (Note 2, &#8220;Merger Agreement&#8221;). The indentures governing the Company&#8217;s
      other senior notes do not contain a change of control repurchase
      obligation.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company&#8217;s senior notes also contain covenants restricting the ability of the
      Company and its subsidiaries to incur liens and to enter into sale and leaseback
      transactions. As of March 31, 2007, the Company was in compliance with all
      covenants and other requirements set forth in its senior notes.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">All of
      the Company&#8217;s senior notes are guaranteed by the same subsidiaries that
      guarantee the Primary Credit Facility. In the event that any such subsidiary
      ceases to be a guarantor under the Primary Credit Facility, such subsidiary
      will
      be released as a guarantor of the senior notes. The Company&#8217;s obligations under
      the senior notes are not secured by the pledge of the assets or capital stock
      of
      any of its subsidiaries.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(10) Pension and
      Other
      Postretirement Benefit Plans</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Net Periodic
      Benefit Cost</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      components of the Company&#8217;s net periodic benefit cost are shown below (in
      millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="280">
            </td>
            <td width="15">
            </td>
            <td width="7">
            </td>
            <td width="29">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="22">
            </td>
            <td width="10">
            </td>
            <td width="7">
            </td>
            <td width="29">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="21">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="373">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td colspan="5" valign="bottom" width="105" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Pension</strong></div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td colspan="5" valign="bottom" width="104" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other
                Postretirement</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="373">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td colspan="5" valign="bottom" width="105" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended</strong></div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td colspan="5" valign="bottom" width="104" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="373">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td colspan="2" valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April
                1,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td colspan="2" valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td colspan="2" valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April
                1,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="373">&#160;</td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="373">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Service
                cost</div>
            </td>
            <td valign="bottom" width="20">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">8.0</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">12.6</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">3.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="373">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                cost</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">10.4</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">10.8</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">3.7</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">3.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="373">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expected
                return on plan assets</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">(10.2</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">(9.7</div>
            </td>
            <td valign="bottom" width="14">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="373">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                of actuarial loss</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">0.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">1.8</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">1.1</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">1.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="373">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                of transition
                obligation&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">0.2</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">0.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="373">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amortization
                of prior service cost</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">1.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">1.3</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">(0.9</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">(0.9</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="373">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Curtailment
                gain, net</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">(36.9</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">(13.4</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="373">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Special
                termination benefits</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">5.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="30" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.1</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.8</div>
            </td>
            <td valign="bottom" width="18">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="28" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="373">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Net
                periodic benefit cost (gain)</div>
            </td>
            <td valign="bottom" width="20">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(21.1</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="30" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">16.9</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(5.6</div>
            </td>
            <td valign="bottom" width="18">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">$</div>
            </td>
            <td valign="bottom" width="28" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">7.7</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In the
      first quarter of 2007, the Company recorded a pension plan curtailment gain
      of
      $36.4 million and an other postretirement benefit plan curtailment gain of
      $14.7
      million. The pension plan curtailment gain resulted from the suspension of
      the
      accrual of defined benefits related to the Company&#8217;s U.S. salaried defined
      benefit pension plan as the Company elected to freeze its U.S. salaried defined
      benefit plan effective December 31, 2006. The other postretirement benefit
      plan
      curtailment gain resulted from employee terminations associated with a facility
      closure in 2006. As both curtailment gains were incurred subsequent to the
      Company&#8217;s defined benefit plan measurement date of September 30, 2006, they were
      recorded in the first quarter of 2007. The Company recognized additional net
      pension and other postretirement benefit costs of $5.2 million and $1.3 million,
      respectively, related to other restructuring actions and the divestiture of
      the
      Company&#8217;s North American interior business.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-155</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(10) Pension and
      Other
      Postretirement Benefit Plans &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Contributions</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Employer
      contributions to the Company&#8217;s domestic and foreign pension plans for the three
      months ended March 31, 2007, were approximately $9.5 million, in aggregate.
      The
      Company expects to contribute an additional $45 million to $50 million, in
      aggregate, to its domestic and foreign pension portfolios in 2007.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(11) Cost of Sales
      and
      Selling, General and Administrative Expenses</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Cost
      of
      sales includes material, labor and overhead costs associated with the
      manufacture and distribution of the Company&#8217;s products. Distribution costs
      include inbound freight costs, purchasing and receiving costs, inspection costs,
      warehousing costs and other costs of the Company&#8217;s distribution network.
      Selling, general and administrative expenses include selling, research and
      development and administrative costs not directly associated with the
      manufacture and distribution of the Company&#8217;s products.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(12) Other (Income)
      Expense, Net</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Other
      (income) expense includes state and local non-income taxes, foreign exchange
      gains and losses, fees associated with the Company&#8217;s asset-backed securitization
      and factoring facilities, minority interests in consolidated subsidiaries,
      equity in net income of affiliates, gains and losses on the sales of assets
      and
      other miscellaneous income and expense. A summary of other (income) expense,
      net
      is shown below (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="220">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="27">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="21">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="294">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April
                1,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="294">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="36">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="28">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="294">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                expense</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">28.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="28">
              <div style="MARGIN: 0pt" align="right">18.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="294">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(3.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="28" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(26.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="294">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                (income) expense,
                net&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">25.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="28" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(8.3</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      first quarter of 2007, other expense includes a loss of $3.9 million related
      to
      the acquisition of the minority interest in an affiliate. For the first quarter
      of 2006, other income includes gains of $25.9 million related to the sales
      of
      the Company&#8217;s interests in two affiliates. </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(13) Income
      Taxes</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      provision for income taxes was $32.4 million in the first quarter of 2007,
      representing an effective tax rate of 39.4%, as compared to a benefit for income
      taxes of $0.2 million, representing an effective tax rate of negative 1.4%,
      in
      the first quarter of 2006. The provision for income taxes in the first quarter
      of 2007 was impacted by costs of $33.8 million related to the divestiture of
      the
      Company&#8217;s interior business, for a significant portion of which no tax benefit
      was provided as it was incurred in the United States. This was offset by the
      impact of the U.S. salaried pension plan curtailment gain of $36.4 million,
      for
      which no tax expense was provided. The provision for income taxes in the first
      quarter of 2007 was also impacted by a portion of the Company&#8217;s restructuring
      charges and costs related to the Merger Agreement, for which no tax benefit
      was
      provided as the charges were incurred in certain countries for which no tax
      benefit is likely to be realized due to a history of operating losses in those
      countries. Excluding these items, the effective tax rate in the first quarter
      of
      2007 approximated the U.S. federal statutory income tax rate of 35% adjusted
      for
      income taxes on foreign earnings, losses and remittances, foreign valuation
      allowances, the U.S. valuation allowance, tax credits, income tax incentives
      and
      other permanent items. Further, the Company&#8217;s current and future provision for
      income taxes is significantly impacted by the recognition of valuation
      allowances in certain countries, particularly the United States. The Company
      intends to maintain these allowances until it is more likely than not that
      the
      deferred tax assets will be realized. The Company&#8217;s future income tax expense
      will include no tax benefit with respect to U.S. losses and no tax expense
      with
      respect to U.S. income until the allowance is eliminated. Accordingly, income
      taxes are impacted by the U.S. valuation allowance and the mix of earnings
      among
      jurisdictions. The benefit for income taxes in the first quarter of 2006
      includes a one-time tax </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-156</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(13) Income Taxes
&#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">benefit of $8.6 million
      resulting from a tax audit resolution and court rulings in certain
      jurisdictions. The benefit for income taxes in the first quarter of 2006 was
      also impacted by gains on the sales of the Company&#8217;s interests in two U.S.
      affiliates, for which no tax expense was recognized, and a portion of the
      Company&#8217;s restructuring charges, for which no tax benefit was provided as the
      charges were incurred in certain countries for which no tax benefit is likely
      to
      be realized due to a history of operating losses in those countries. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      January 1, 2007 the Company adopted the provisions of Interpretation (&#8220;FIN&#8221;) No.
      48, &#8220;Accounting for Uncertainty in Income Taxes &#8212; an Interpretation of FASB
      Statement No. 109.&#8221; FIN 48 clarifies the accounting for uncertainty in income
      taxes by establishing minimum standards for the recognition and measurement
      of
      tax positions taken or expected to be taken in a tax return. Under the
      requirements of FIN 48, the Company must review all of its tax positions and
      make a determination as to whether its position is more-likely-than-not to
      be
      sustained upon examination by regulatory authorities. If a tax position meets
      the more-likely-than-not standard, then the related tax benefit is measured
      based on the cumulative probability analysis of the amount that is
      more-likely-than-not to be realized upon ultimate settlement or disposition
      of
      the underlying issue.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company recognized the cumulative impact of adopting FIN 48 as a $4.5 million
      decrease to its liability for unrecognized tax benefits with a corresponding
      decrease to the Company&#8217;s retained deficit balance as of January&#160;1, 2007.
      As of January 1, 2007, the Company&#8217;s gross unrecognized tax benefits were $148.6
      million (including interest and penalties), of which $114.9 million, if
      recognized, would affect the Company&#8217;s effective tax rate. The gross
      unrecognized tax benefits differ from the amount that would affect the effective
      tax rate due primarily to the impact of the valuation allowance. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company continues to recognize both interest and penalties accrued with respect
      to unrecognized tax benefits as income tax expense. As of January 1, 2007 the
      Company had recorded reserves for the payment of interest and penalties in
      the
      amount of $28.6 million. During the three months ended March 31, 2007, the
      Company recognized an increase in liability for gross interest and penalties
      of
      approximately $4.4 million.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company operates in multiple jurisdictions throughout the world, and its tax
      returns are periodically audited or subject to review by both domestic and
      foreign tax authorities. The Company considers its significant tax jurisdictions
      to include Canada, Germany, Hungary, Mexico, Poland, Spain and the United
      States. The Company or its subsidiaries remain subject to income tax examination
      in certain U.S. state and local jurisdictions for years after 1998, in Germany,
      Mexico and Poland for years after 2000, in Spain for years after 2001 and in
      the
      U.S. federal jurisdiction, Canada and Hungary for years after 2002.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(14) Net Income Per
      Share</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Basic
      net income per share is computed using the weighted average common shares
      outstanding during the period. Diluted net income per share includes the
      dilutive effect of common stock equivalents using the average share price during
      the period, as well as shares issuable upon conversion of the Company&#8217;s
      outstanding zero-coupon convertible senior notes. A summary of shares
      outstanding is shown below:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="246">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="45">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="45">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="328">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="150" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="328">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April
                1,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="328">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="328">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Weighted
                average common shares
                outstanding&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">76,410,482</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">67,216,992</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="328">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Dilutive
                effect of common stock equivalents</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">1,579,369</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">724,075</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="328">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted
                shares outstanding</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">77,989,851</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">&#160;</td>
            <td valign="bottom" width="60" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">67,941,067</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="328">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Diluted
                net income per share</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">0.64</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="60">
              <div style="MARGIN: 0pt" align="right">0.26</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Shares
      issuable upon conversion of the Company&#8217;s outstanding zero-coupon convertible
      debt and the effect of certain common stock equivalents, including options,
      restricted stock units, performance units and stock appreciation rights, were
      excluded from the computation of diluted shares outstanding for the three months
      ended </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-157</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(14) Net Income Per
      Share &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt">March 31, 2007 and April
      1, 2006, as inclusion would have resulted in antidilution. A summary of these
      options and their exercise prices, as well as these restricted stock units
      and
      stock appreciation rights, is shown below: </div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="202">
            </td>
            <td width="12">
            </td>
            <td width="65">
            </td>
            <td width="12">
            </td>
            <td width="65">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="270">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td colspan="3" valign="bottom" width="190" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="270">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31, 2007</strong></div>
            </td>
            <td valign="top" width="16" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="86" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April
                1, 2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="270">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Options</strong></div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Antidilutive
                options</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="center">2,236,780</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="center">2,907,005</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Exercise
                price</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="center">$35.93 &#8211; $55.33</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="center">$22.12 &#8211; $55.33</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Restricted
                stock units</strong></div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="center">&#8212;</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="center">821,237</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Performance
                units</strong></div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="center">&#8212;</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="center">48,563</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="270">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Stock
                appreciation
                rights&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="center">642,285</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="86">
              <div style="MARGIN: 0pt" align="center">1,138,114</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(15) Comprehensive
      Income </strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Comprehensive
      income is defined as all changes in a Company&#8217;s net assets except changes
      resulting from transactions with stockholders. It differs from net income in
      that certain items currently recorded in equity are included in comprehensive
      income. A summary of comprehensive income is shown below (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="261">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="27">
            </td>
            <td width="15">
            </td>
            <td width="6">
            </td>
            <td width="22">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="349">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="106" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="349">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April
                1,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="349">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="36">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="349">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">49.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">17.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="349">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                comprehensive income (loss):</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="36">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="29">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="349">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 16.2pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Derivative
                instruments and hedging
                activities&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="36">
              <div style="MARGIN: 0pt" align="right">(5.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="29">
              <div style="MARGIN: 0pt" align="right">(5.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="349">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 16.2pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                currency translation adjustment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">13.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="29" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">15.6</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="349">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                comprehensive income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="36" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">8.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="29" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">9.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="349">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Comprehensive
                income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="36" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">58.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="29" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">27.7</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(16) Pre-Production
      Costs Related to Long-Term Supply Agreements</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company incurs pre-production engineering, research and development (&#8220;ER&amp;D&#8221;)
      and tooling costs related to the products produced for its customers under
      long-term supply agreements. The Company expenses all pre-production ER&amp;D
      costs for which reimbursement is not contractually guaranteed by the customer.
      In addition, the Company expenses all pre-production tooling costs related
      to
      customer-owned tools for which reimbursement is not contractually guaranteed
      by
      the customer or for which the customer has not provided a non-cancelable right
      to use the tooling. During the first quarters of 2007 and 2006, the Company
      capitalized $22.4 million and $38.8 million, respectively, of pre-production
      ER&amp;D costs for which reimbursement is contractually guaranteed by the
      customer. In addition, during the first quarters of 2007 and 2006, the Company
      capitalized $42.5 million and $173.9 million, respectively, of pre-production
      tooling costs related to customer-owned tools for which reimbursement is
      contractually guaranteed by the customer or for which the customer has provided
      a non-cancelable right to use the tooling. These amounts are included in other
      current and long-term assets in the condensed consolidated balance sheets.
      During the first quarters of 2007 and 2006, the Company collected $91.6 million
      and $298.5 million, respectively, of cash related to ER&amp;D and tooling costs.
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">During
      the first quarter of 2007, the Company did not capitalize any Company-owned
      tooling. During the first quarter of 2006, the Company capitalized $1.4 million
      of Company-owned tooling. Amounts capitalized as Company-owned tooling are
      included in property, plant and equipment, net in the condensed consolidated
      balance sheets.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-158</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(16) Pre-Production
      Costs Related to Long-Term Supply Agreements &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      classification of recoverable customer engineering and tooling is shown below
      (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="229">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="28">
            </td>
            <td width="12">
            </td>
            <td width="8">
            </td>
            <td width="38">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="305">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td colspan="2" valign="top" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td colspan="2" valign="top" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="305">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="11">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="305">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">61.4</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="11">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">87.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="305">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">112.8</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="11" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">116.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="305">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Recoverable
                customer engineering and
                tooling&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">174.2</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="11" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">203.9</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Gains
      and
      losses related to ER&amp;D and tooling projects are reviewed on an aggregated
      program basis. Net gains on projects are deferred and recognized over the life
      of the long-term supply agreement. Net losses on projects are recognized as
      costs are incurred.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(17) Legal and Other
      Contingencies</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      March 31, 2007 and December 31, 2006, the Company had recorded reserves for
      pending legal disputes, including commercial disputes and other matters, of
      $21.3 million and $18.0 million, respectively. Such reserves reflect amounts
      recognized in accordance with accounting principles generally accepted in the
      United States and typically exclude the cost of legal representation. Product
      warranty liabilities are recorded separately from legal liabilities, as
      described below.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Commercial
      Disputes</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company is involved from time to time in legal proceedings and claims,
      including, without limitation, commercial or contractual disputes with its
      suppliers, competitors and customers. These disputes vary in nature and are
      usually resolved by negotiations between the parties. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      January 29, 2002, Seton Company (&#8220;Seton&#8221;), one of the Company&#8217;s leather
      suppliers, filed a suit alleging that the Company had breached a purported
      agreement to purchase leather from Seton for seats for the life of the General
      Motors GMT 800 program. Seton filed the lawsuit in the U.S. District Court
      for
      the Eastern District of Michigan seeking compensatory and exemplary damages
      totaling approximately $96.5 million, plus interest, on breach of contract
      and
      promissory estoppel claims. In May 2005, this case proceeded to trial, and
      the
      jury returned a $30.0 million verdict against the Company. On September 27,
      2005, the Court denied the Company&#8217;s post-trial motions challenging the judgment
      and granted Seton&#8217;s motion to award prejudgment interest in the amount of
      approximately $4.7 million. On October 4, 2006, the Sixth Circuit Court of
      Appeals affirmed the judgment of the trial court. On October 18, 2006, the
      Company filed a Petition for Rehearing with the court which was denied on
      November 16, 2006. On December 7, 2006, the Court of Appeals issued a mandate
      indicating that the order affirming the judgment was final. In December 2006,
      the Company paid the principal and all remaining interest on the judgment.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On
      January 26, 2004, the Company filed a patent infringement lawsuit against
      Johnson Controls Inc. and Johnson Controls Interiors LLC (together, &#8220;JCI&#8221;) in
      the U.S. District Court for the Eastern District of Michigan alleging that
      JCI&#8217;s
      garage door opener products infringed certain of the Company&#8217;s radio frequency
      transmitter patents. JCI counterclaimed seeking a declaratory judgment that
      the
      subject patents are invalid and unenforceable, and that JCI is not infringing
      these patents. JCI also has filed motions for summary judgment asserting that
      its garage door opener products do not infringe the Company&#8217;s patents and that
      one of the Company&#8217;s patents is invalid and unenforceable. The Company is
      vigorously pursuing its claims against JCI. A trial date has not been
      scheduled.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">After
      the
      Company filed its patent infringement action against JCI, affiliates of JCI
      sued
      one of the Company&#8217;s vendors and certain of the vendor&#8217;s employees in Ottawa
      County, Michigan Circuit Court on July 8, 2004, alleging misappropriation of
      trade secrets and disclosure of confidential information. The suit alleges
      that
      the defendants misappropriated and shared with the Company trade secrets
      involving JCI&#8217;s universal garage door opener product. JCI seeks to enjoin the
      defendants from selling or attempting to sell a competing product, as well
      as
      compensatory </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-159</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
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    to Index</strong></font></a></p>
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    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(17) Legal and Other
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">damages and attorney fees.
      The Company is not a defendant in this lawsuit; however, the agreements between
      the Company and the defendants contain customary indemnification provisions.
      The
      Company does not believe that its garage door opener product benefited from
      any
      allegedly misappropriated trade secrets or technology. However, JCI has sought
      discovery of certain information which the Company believes is confidential
      and
      proprietary, and the Company has intervened in the case as a non-party for
      the
      limited purpose of protecting its rights with respect to JCI&#8217;s discovery
      efforts. The trial has been rescheduled to October 2007.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On June
      13, 2005, The Chamberlain Group (&#8220;Chamberlain&#8221;) filed a lawsuit against the
      Company and Ford Motor Company (&#8220;Ford&#8221;) in the Northern District of Illinois
      alleging patent infringement. Two counts were asserted against the Company
      and
      Ford based upon two Chamberlain rolling-code garage door opener system patents.
      Two additional counts were asserted against Ford only (not the Company) based
      upon different Chamberlain patents. The Chamberlain lawsuit was filed in
      connection with the marketing of the Company&#8217;s universal garage door opener
      system, which competes with a product offered by JCI. JCI obtained technology
      from Chamberlain to operate its product. In October 2005, JCI joined the lawsuit
      as a plaintiff along with Chamberlain. In October 2006, Ford was dismissed
      from
      the suit. JCI and Chamberlain have filed a motion for a preliminary injunction,
      and on March 30, 2007, the Court issued a decision granting plaintiffs&#8217; motion
      for a preliminary injunction but did not enter an injunction at that time.
      In
      response, the Company filed a motion seeking to stay the effectiveness of any
      injunction that may be entered and General Motors Corporation (&#8220;GM&#8221;) moved to
      intervene. On April 25, 2007, the court granted GM&#8217;s motion to intervene,
      entered a preliminary injunction order that exempts the Company&#8217;s existing GM
      programs and denied the Company&#8217;s motion to stay the effectiveness of the
      preliminary injunction order pending appeal. On April 27, 2007, the Company
      filed its notice of appeal from the granting of the preliminary injunction
      and
      the denial of its motion to stay its effectiveness. No trial date has been
      set
      by the district court.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Product Liability
      Matters</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In the
      event that use of the Company&#8217;s products results in, or is alleged to result in,
      bodily injury and/or property damage or other losses, the Company may be subject
      to product liability lawsuits and other claims. In addition, the Company is
      a
      party to warranty-sharing and other agreements with its customers relating
      to
      its products. These customers may pursue claims against the Company for
      contribution of all or a portion of the amounts sought in connection with
      product liability and warranty claims. The Company can provide no assurances
      that it will not experience material claims in the future or that it will not
      incur significant costs to defend such claims. In addition, if any of the
      Company&#8217;s products are, or are alleged to be, defective, the Company may be
      required or requested by its customers to participate in a recall or other
      corrective action involving such products. Certain of the Company&#8217;s customers
      have asserted claims against the Company for costs related to recalls or other
      corrective actions involving its products. In certain instances, the allegedly
      defective products were supplied by tier II suppliers against whom the Company
      has sought or will seek contribution. The Company carries insurance for certain
      legal matters, including product liability claims, but such coverage may be
      limited. The Company does not maintain insurance for product warranty or recall
      matters.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company records product warranty liabilities based on its individual customer
      agreements. Product warranty liabilities are recorded for known warranty issues
      when amounts related to such issues are probable and reasonably estimable.
      In
      certain product liability and warranty matters, the Company may seek recovery
      from its suppliers that supply materials or services included within the
      Company&#8217;s products that are associated with the related claims.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-160</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
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    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(17) Legal and Other
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      summary of the changes in product warranty liabilities for the three months
      ended March 31, 2007, is shown below (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="295">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="17">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="394">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of January 1, 2007</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="23">
              <div style="MARGIN: 0pt" align="right">40.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="394">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 13.8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="23">
              <div style="MARGIN: 0pt" align="right">1.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="394">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 13.8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                related to favorable
                settlements&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="23">
              <div style="MARGIN: 0pt" align="right">(2.7</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="394">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 13.8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Settlements</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="23">
              <div style="MARGIN: 0pt" align="right">(5.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="394">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 13.8pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Foreign
                currency translation and other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="23" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="394">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Balance
                as of March 31, 2007</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 2pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="23" style="border-bottom: #000000 2pt double;">
              <div style="MARGIN: 0pt" align="right">32.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Environmental
      Matters</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company is subject to local, state, federal and foreign laws, regulations and
      ordinances which govern activities or operations that may have adverse
      environmental effects and which impose liability for clean-up costs resulting
      from past spills, disposals or other releases of hazardous wastes and
      environmental compliance. The Company&#8217;s policy is to comply with all applicable
      environmental laws and to maintain an environmental management program based
      on
      ISO 14001 to ensure compliance. However, the Company currently is, has been
      and
      in the future may become the subject of formal or informal enforcement actions
      or procedures.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company has been named as a potentially responsible party at several third-party
      landfill sites and is engaged in the cleanup of hazardous waste at certain
      sites
      owned, leased or operated by the Company, including several properties acquired
      in its 1999 acquisition of UT Automotive, Inc. (&#8220;UT Automotive&#8221;). Certain
      present and former properties of UT Automotive are subject to environmental
      liabilities which may be significant. The Company obtained agreements and
      indemnities with respect to certain environmental liabilities from United
      Technologies Corporation (&#8220;UTC&#8221;) in connection with its acquisition of UT
      Automotive. UTC manages and directly funds these environmental liabilities
      pursuant to its agreements and indemnities with the Company. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      March 31, 2007 and December 31, 2006, the Company had recorded reserves for
      environmental matters of $2.8 million and $3.2 million, respectively. While
      the
      Company does not believe that the environmental liabilities associated with
      its
      current and former properties will have a material adverse effect on its
      business, consolidated financial position, results of operations or cash flows,
      no assurances can be given in this regard.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">One of
      the Company&#8217;s subsidiaries and certain predecessor companies were named as
      defendants in an action filed by three plaintiffs in August 2001 in the Circuit
      Court of Lowndes County, Mississippi, asserting claims stemming from alleged
      environmental contamination caused by an automobile parts manufacturing plant
      located in Columbus, Mississippi. The plant was acquired by the Company as
      part
      of its acquisition of UT Automotive in May 1999 and sold almost immediately
      thereafter, in June 1999, to Johnson Electric Holdings Limited (&#8220;Johnson
      Electric&#8221;). In December 2002, 61 additional cases were filed by approximately
      1,000 plaintiffs in the same court against the Company and other defendants
      relating to similar claims. In September 2003, the Company was dismissed as
      a
      party to these cases. In the first half of 2004, the Company was named again
      as
      a defendant in these same 61 additional cases and was also named in five new
      actions filed by approximately 150 individual plaintiffs related to alleged
      environmental contamination from the same facility. The plaintiffs in these
      actions are persons who allegedly were either residents and/or owned property
      near the facility or worked at the facility. In November 2004, two additional
      lawsuits were filed by 28 plaintiffs (individuals and organizations), alleging
      property damage as a result of the alleged contamination. Each of these
      complaints seeks compensatory and punitive damages.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">All of
      the plaintiffs subsequently dismissed their claims for health effects and
      personal injury damages and the cases proceeded with approximately 280
      plaintiffs alleging property damage claims only. In March 2005, the venue for
      these lawsuits was transferred from Lowndes County, Mississippi, to Lafayette
      County, Mississippi. In April 2005, certain plaintiffs filed an amended
      complaint alleging negligence, nuisance, intentional tort and conspiracy claims
      and seeking compensatory and punitive damages. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-161</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
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    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(17) Legal and Other
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In the
      first quarter of 2006, co-defendant UTC entered into a settlement agreement
      with
      the plaintiffs. During the third quarter of 2006, the Company and co-defendant
      Johnson Electric entered into a settlement memorandum with the plaintiffs&#8217;
counsel outlining the terms of a global settlement, including establishing
      the
      requisite percentage of executed settlement agreements and releases that were
      required to be obtained from the individual plaintiffs for a final settlement
      to
      proceed. Since November 2006, the Company has reached a final settlement with
      respect to approximately 85% of the plaintiffs involving aggregate payments
      of
      $875,000 and is in the process of attempting to resolve the remaining
      claims.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">UTC,
      the
      former owner of UT Automotive, and Johnson Electric have each sought
      indemnification for losses associated with the Mississippi claims from the
      Company under the respective acquisition agreements, and the Company has claimed
      indemnification from them under the same agreements. In the first quarter of
      2006, UTC filed a lawsuit against the Company in the State of Connecticut
      Superior Court, District of Hartford, seeking declaratory relief and
      indemnification from the Company for the settlement amount, attorney fees,
      costs
      and expenses UTC paid in settling and defending the Columbus, Mississippi
      lawsuits. In the second quarter of 2006, the Company filed a motion to dismiss
      this matter and filed a separate action against UTC and Johnson Electric in
      the
      State of Michigan, Circuit Court for the County of Oakland, seeking declaratory
      relief and indemnification from UTC or Johnson Electric for the settlement
      amount, attorney fees, costs and expenses the Company has paid, or will pay,
      in
      settling and defending the Columbus, Mississippi lawsuits. During the fourth
      quarter of 2006, UTC agreed to dismiss the lawsuit filed in the State of
      Connecticut Superior Court, District of Hartford and agreed to proceed with
      the
      lawsuit filed in the State of Michigan, Circuit Court for the County of Oakland.
      During the first quarter of 2007, Johnson Electric and UTC each filed
      counter-claims against the Company seeking declaratory relief and
      indemnification from the Company for the settlement amount, attorney fees,
      costs
      and expenses each has paid or will pay in settling and defending the Columbus,
      Mississippi lawsuits. To date, no company admits to, or has been found to have,
      an obligation to fully defend and indemnify any other. The Company intends
      to
      vigorously pursue its claims against UTC and Johnson Electric and believes
      that
      it is entitled to indemnification from either UTC or Johnson Electric for its
      losses. However, the ultimate outcome of these matters is unknown.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Other
      Matters</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In
      January 2004, the Securities and Exchange Commission (the &#8220;SEC&#8221;) commenced an
      informal inquiry into the Company&#8217;s September 2002 amendment of its 2001 Form
      10-K. The amendment was filed to report the Company&#8217;s employment of relatives of
      certain of its directors and officers and certain related party transactions.
      The SEC&#8217;s inquiry does not relate to the Company&#8217;s consolidated financial
      statements. In February 2005, the staff of the SEC informed the Company that
      it
      proposed to recommend to the SEC that it issue an administrative &#8220;cease and
      desist&#8221; order as a result of the Company&#8217;s failure to disclose the related party
      transactions in question prior to the amendment of its 2001 Form 10-K. The
      Company expects to consent to the entry of the order as part of a settlement
      of
      this matter.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">In April
      2006, a former employee of the Company filed a purported class action lawsuit
      in
      the U.S. District Court for the Eastern District of Michigan against the
      Company, members of its Board of Directors, members of its Employee Benefits
      Committee (the &#8220;EBC&#8221;) and certain members of its human resources personnel
      alleging violations of the Employment Retirement Income Security Act (&#8220;ERISA&#8221;)
      with respect to the Company&#8217;s retirement savings plans for salaried and hourly
      employees. In the second quarter of 2006, the Company was served with three
      additional purported class action ERISA lawsuits, each of which contained
      similar allegations against the Company, members of its Board of Directors,
      members of its EBC and certain members of its senior management and its human
      resources personnel. At the end of the second quarter of 2006, the court entered
      an order consolidating these four lawsuits as <i>In re: Lear Corp. ERISA
      Litigation.</i> During the third quarter of 2006, plaintiffs filed their
      consolidated complaint, which alleges breaches of fiduciary duties substantially
      similar to those alleged in the four individually filed lawsuits. The
      consolidated complaint continues to name certain current and former members
      of
      the Board of Directors and the EBC and certain members of senior management
      and
      adds certain other current and former members of the EBC. The consolidated
      complaint generally alleges that the defendants breached their </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-162</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
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    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(17) Legal and Other
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">fiduciary duties to plan
      participants in connection with the administration of the Company&#8217;s retirement
      savings plans for salaried and hourly employees. The fiduciary duty claims
      are
      largely based on allegations of breaches of the fiduciary duties of prudence
      and
      loyalty and of over-concentration of plan assets in the Company&#8217;s common stock.
      The plaintiffs purport to bring these claims on behalf of the plans and all
      persons who were participants in or beneficiaries of the plans from October
      21,
      2004, to the present and seek to recover losses allegedly suffered by the plans.
      The complaints do not specify the amount of damages sought. During the fourth
      quarter of 2006, the defendants filed a motion to dismiss all defendants and
      all
      counts in the consolidated complaint. The filings related to the motion to
      dismiss have been made, but the Court has not yet ruled on the motion. No
      determination has been made that a class action can be maintained, and there
      have been no decisions on the merits of the cases. The Company intends to
      vigorously defend the consolidated lawsuit.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">On March
      1, 2007, a purported class action ERISA lawsuit was filed on behalf of
      participants in the Company&#8217;s 401(k) plans. The lawsuit was filed in the United
      States District Court for the Eastern District of Michigan and alleges that
      the
      Company, members of its Board of Directors, and members of the Employee Benefits
      Committee (collectively, the &#8220;Lear Defendants&#8221;) breached their fiduciary duties
      to the participants in the 401(k) plans by approving the Agreement and Plan
      of
      Merger (the &#8220;Merger Agreement&#8221;) with AREP Car Holdings Corp. and AREP Car
      Acquisition Corp. (collectively the &#8220;AREP Entities&#8221;). On March 8, 2007, the
      plaintiff filed a motion for expedited discovery to support a potential motion
      for preliminary injunction to enjoin the Merger Agreement. The Lear Defendants
      filed an opposition to the motion for expedited discovery on March 22, 2007.
      Plaintiff filed a reply on April 11, 2007. On April 18, 2007, the Judge denied
      plaintiff&#8217;s motion for expedited discovery. On March 15, 2007, the plaintiff
      requested that the case be reassigned to the Judge overseeing <i>In re: Lear
      Corp. ERISA Litigation</i> (described above). The Lear Defendants have opposed
      the reassignment. On March 22, 2007, the Lear Defendants filed a motion to
      dismiss all counts of the complaint against the Lear Defendants. Plaintiff
      also
      filed a motion for preliminary injunction and expedited briefing schedule on
      April 10, 2007. The Lear Defendants&#8217; opposition brief is due May 10, 2007. The
      Court has not set a hearing date on either of these motions. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Between
      February 9, 2007 and February 21, 2007, certain stockholders filed six purported
      class action lawsuits against the Company, certain members of the Company&#8217;s
      Board of Directors and American Real Estate Partners, L.P. and certain of its
      affiliates (collectively, &#8220;AREP&#8221;). Three of the lawsuits were filed in the
      Delaware Court of Chancery and have since been consolidated into a single
      action. Three of the lawsuits were filed in Michigan Circuit Court; those too
      have since been consolidated into a single action. The class action complaints,
      which are substantially similar, generally allege that the Merger Agreement
      unfairly limits the process of selling the Company and that certain members
      of
      the Company&#8217;s Board of Directors have breached their fiduciary duties in
      connection with the Merger Agreement and have acted with conflicts of interest
      in approving the Merger Agreement. The lawsuits seek to enjoin the merger,
      to
      invalidate the Merger Agreement and to enjoin the operation of certain
      provisions of the Merger Agreement, a declaration that certain members of the
      Company&#8217;s Board of Directors breached their fiduciary duties in approving the
      Merger Agreement and an award of unspecified damages or rescission in the event
      that the proposed merger with AREP is completed. On February 23, 2007, the
      plaintiffs in the consolidated Delaware action filed a consolidated amended
      complaint, a motion for expedited proceedings and a motion to preliminarily
      enjoin the transactions contemplated by the Merger Agreement. On March 27,
      2007,
      the plaintiffs in the consolidated Delaware action filed a consolidated second
      amended complaint. On May 9, 2007, the court overseeing the consolidated
      Michigan action will hear the Company&#8217;s motion to dismiss that action. A hearing
      on the plaintiffs&#8217; motion for preliminary injunction in the consolidated
      Delaware action is scheduled for June 6, 2007, and a trial is scheduled for
      the
      fourth quarter of 2007. The Company believes that the lawsuits are without
      merit
      and intends to defend against them vigorously.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Although
      the Company records reserves for legal, product warranty and environmental
      matters in accordance with SFAS No. 5, &#8220;Accounting for Contingencies,&#8221; the
      outcomes of these matters are inherently uncertain. Actual results may differ
      significantly from current estimates.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company is involved in certain other legal actions and claims arising in the
      ordinary course of business, including, without limitation, commercial disputes,
      intellectual property matters, personal injury claims, tax claims </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-163</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(17) Legal and Other
      Contingencies &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">and employment matters.
      Although the outcome of any legal matter cannot be predicted with certainty,
      the
      Company does not believe that any of these other legal proceedings or matters
      in
      which the Company is currently involved, either individually or in the
      aggregate, will have a material adverse effect on its business, consolidated
      financial position, results of operations or cash flows.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(18) Segment
      Reporting</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Historically,
      the Company has had three reportable operating segments: seating, electronic
      and
      electrical and interior. The seating segment includes seat systems and
      components thereof. The electronic and electrical segment includes electronic
      products and electrical distribution systems, primarily wire harnesses and
      junction boxes, interior control and entertainment systems and wireless systems.
      The interior segment includes instrument panels and cockpit systems, headliners
      and overhead systems, door panels, flooring and acoustic systems and other
      interior products (Note 3, &#8220;Divestiture of Interior Business&#8221;). The Other
      category includes unallocated costs related to corporate headquarters,
      geographic headquarters and the elimination of intercompany activities, none
      of
      which meets the requirements of being classified as an operating segment.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      Company evaluates the performance of its operating segments based primarily
      on
      (i) revenues from external customers, (ii) income (loss) before loss on
      divestiture of interior business, interest expense, other (income) expense,
      provision (benefit) for income taxes and cumulative effect of a change in
      accounting principle (&#8220;segment earnings&#8221;) and (iii) cash flows, being defined as
      segment earnings less capital expenditures plus depreciation and amortization.
      A
      summary of revenues from external customers and other financial information
      by
      reportable operating segment is shown below (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="209">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="31">
            </td>
            <td width="13">
            </td>
            <td width="7">
            </td>
            <td width="44">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="23">
            </td>
            <td width="13">
            </td>
            <td width="5">
            </td>
            <td width="23">
            </td>
            <td width="13">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="279">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="14" valign="bottom" width="326" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended March 31,
                2007</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="279">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Seating</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="69" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Electronic
                and<br>Electrical</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Interior</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="279">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="31">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="31">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="279">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues
                from external
                customers&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">2,994.2</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">788.7</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">623.2</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">4,406.1</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="279">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Segment
                earnings</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">197.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">17.5</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">8.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">(39.0</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">184.4</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="279">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">40.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">28.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">1.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">4.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">74.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="279">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
                expenditures</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">20.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">8.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">0.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">0.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">29.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="279">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                assets</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">4,371.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">2,277.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">134.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">877.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">7,661.0</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt">&#160;</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="210">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="43">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="22">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="38">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="280">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="326" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended April 1, 2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="280">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Seating</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="67" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Electronic
                and<br>Electrical</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Interior</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Other</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="280">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="57">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="280">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Revenues
                from external
                customers&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">2,992.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">787.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">898.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">4,678.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="280">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Segment
                earnings</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">125.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">53.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">(59.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">(65.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">54.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="280">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Depreciation
                and amortization</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">40.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">26.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">24.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">5.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">97.8</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="280">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Capital
                expenditures</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">36.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">15.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">33.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">7.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">92.6</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="280">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Total
                assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">4,170.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="57">
              <div style="MARGIN: 0pt" align="right">2,178.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,511.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="30">
              <div style="MARGIN: 0pt" align="right">621.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">8,481.3</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For the
      three months ended March 31, 2007, segment earnings include restructuring
      charges of ($4.7) million, $17.9 million and $0.4 million in the seating and
      electronic and electrical segments and in the other category, respectively.
      For
      the three months ended April 1, 2006, segment earnings include restructuring
      charges of $15.1 million, $2.0 million and $5.8 million in the seating,
      electronic and electrical and interior segments, respectively (Note 5,
&#8220;Restructuring&#8221;).</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-164</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(18) Segment Reporting
      &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">A
      reconciliation of consolidated segment earnings to consolidated income before
      provision (benefit) for income taxes and cumulative effect of a change in
      accounting principle is shown below (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="268">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="28">
            </td>
            <td width="14">
            </td>
            <td width="5">
            </td>
            <td width="20">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="357">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="101" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="357">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March&#160;31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td colspan="2" valign="bottom" width="35" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April&#160;1,<br>2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="357">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="357">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Segment
                earnings</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">184.4</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">54.2</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="357">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                on divestiture of Interior
                business&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">25.6</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="357">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">51.5</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="27">
              <div style="MARGIN: 0pt" align="right">47.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="357">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                (income) expense, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">25.0</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="27" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(8.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="357">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Income
                before provision (benefit) for income taxes and cumulative<br>effect of a
                change in accounting principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">82.3</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="27" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">14.8</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(19) Financial
      Instruments</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Certain
      of the Company&#8217;s European and Asian subsidiaries periodically factor their
      accounts receivable with financial institutions. Such receivables are factored
      without recourse to the Company and are excluded from accounts receivable in
      the
      condensed consolidated balance sheets. As of March 31, 2007 and December 31,
      2006, the amount of factored receivables was $219.9 million and $256.3 million,
      respectively. The Company cannot provide any assurances that these factoring
      facilities will be available or utilized in the future.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Asset-Backed
      Securitization Facility</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company and several of its U.S. subsidiaries sell certain accounts receivable
      to
      a wholly-owned, consolidated, bankruptcy-remote special purpose corporation
      (Lear ASC Corporation) under an asset-backed securitization facility (the &#8220;ABS
      facility&#8221;). In turn, Lear ASC Corporation transfers undivided interests in up to
      $150 million of the receivables to bank-sponsored commercial-paper conduits.
      As
      of March 31, 2007 and December 31, 2006, accounts receivable totaling $445.4
      million and $568.6 million, respectively, had been transferred to Lear ASC
      Corporation, but no undivided interests in the receivables were transferred
      to
      the conduits. As such, these retained interests are included in accounts
      receivable in the condensed consolidated balance sheets as of March 31, 2007
      and
      December 31, 2006. In the first quarter of 2006, a discount on the sale of
      receivables of $1.6 million was recognized and is reflected in other (income)
      expense, net in the condensed consolidated statement of income.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      Company retains a subordinated ownership interest in the pool of receivables
      sold to Lear ASC Corporation. This retained interest is recorded at fair value,
      which is generally based on a discounted cash flow analysis. The Company
      continues to service the transferred receivables for an annual servicing fee.
      The conduit investors and Lear ASC Corporation have no recourse to the Company
      or its subsidiaries for the failure of the accounts receivable obligors to
      pay
      timely on the accounts receivable.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-165</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(19) Financial
      Instruments &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">The
      following table summarizes certain cash flows received from and paid to Lear
      ASC
      Corporation (in millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="280">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="28">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="374">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="5" valign="bottom" width="110" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Three
                Months Ended</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="374">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>April
                1,<br>2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="374">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="374">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from collections reinvested in
                securitizations&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">932.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,071.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="374">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Servicing
                fees received</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">1.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1.5</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Derivative
      Instruments and Hedging Activities</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Forward
      foreign exchange, futures and option contracts &#8212; The Company uses forward
      foreign exchange, futures and option contracts to reduce the effect of
      fluctuations in foreign exchange rates on short-term, foreign currency
      denominated intercompany transactions and other known foreign currency
      exposures. Gains and losses on the derivative instruments are intended to offset
      gains and losses on the hedged transaction in an effort to reduce the earnings
      volatility resulting from fluctuations in foreign exchange rates. The principal
      currencies hedged by the Company include the Mexican peso and the Hungarian
      forint, as well as the Euro and other European currencies. Forward foreign
      exchange, futures and option contracts are accounted for as cash flow hedges
      when the hedged item is a forecasted transaction or the variability of cash
      flows to be received or paid related to a recognized asset or liability. As
      of
      March 31, 2007, contracts designated as cash flow hedges with $380.4 million
      of
      notional amount were outstanding with maturities of less than nine months.
      As of
      March 31, 2007, the fair market value of these contracts was approximately
      $9.4
      million. As of March 31, 2007, other foreign currency derivative contracts
      that
      did not qualify for hedge accounting with $439.8 million of notional amount
      were
      outstanding. These foreign currency derivative contracts consist principally
      of
      cash transactions between three and thirty days, hedges of intercompany loans
      and hedges of certain other balance sheet exposures. As of March 31, 2007,
      the
      fair market value of these contracts was approximately $1.6 million.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Interest
      rate swap contracts &#8212; The Company uses interest rate swap contracts to manage
      its exposure to fluctuations in interest rates. Interest rate swap contracts
      which fix the interest payments of certain variable rate debt instruments or
      fix
      the market rate component of anticipated fixed rate debt instruments are
      accounted for as cash flow hedges. Interest rate swap contracts which hedge
      the
      change in fair market value of certain fixed rate debt instruments are accounted
      for as fair value hedges. As of March 31, 2007, contracts representing $800.0
      million of notional amount were outstanding with maturity dates of August 2007
      through September 2011. All of these contracts modify the variable rate
      characteristics of the Company&#8217;s variable rate debt instruments, which are
      generally set at three-month LIBOR rates. These contracts convert variable
      rate
      obligations into fixed rate obligations with a weighted average interest rate
      of
      4.902%. The fair market value of all outstanding interest rate swap contracts
      is
      subject to changes in value due to changes in interest rates. As of March 31,
      2007, the fair market value of these contracts was approximately negative $5.0
      million.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Commodity
      swap contracts &#8212; The Company uses derivative instruments including financially
      settled forward, swap and option contracts to manage its exposure to
      fluctuations in certain commodity prices. All derivative instruments are
      currently designated as cash flow hedges, as the hedged item is a forecasted
      transaction. Gains and losses on the derivative instruments are intended to
      offset gains and losses on the hedged transaction in an effort to reduce the
      earnings volatility resulting from fluctuations in commodity prices. As of
      March
      31, 2007, the fair market value of these commodity instruments was $1.1 million
      with maturity dates through December 2008.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      March 31, 2007 and December 31, 2006, net gains of approximately $9.8 million
      and $14.7 million, respectively, related to derivative instruments and hedging
      activities were recorded in accumulated other comprehensive loss. In the three
      months ended March 31, 2007 and April 1, 2006, net gains of $3.6 million and
      $1.6 million, respectively, related to the Company&#8217;s hedging activities were
      reclassified from accumulated other comprehensive loss into earnings. During
      the
      twelve month period ending March 29, 2008, the Company expects to reclassify
      into earnings net gains of approximately $11.5 million recorded in accumulated
      other comprehensive loss. </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-166</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(19) Financial
      Instruments &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">Such gains will be
      reclassified at the time the underlying hedged transactions are realized. During
      the three months ended March 31, 2007 and April 1, 2006, amounts recognized
      in
      the condensed consolidated statements of income related to changes in the fair
      value of cash flow and fair value hedges excluded from the effectiveness
      assessments and the ineffective portion of changes in the fair value of cash
      flow and fair value hedges were not material.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Non-U.S.
      dollar financing transactions &#8212; The Company designated its previously
      outstanding Euro-denominated senior notes (Note 9, &#8220;Long-Term Debt&#8221;) as a net
      investment hedge of long-term investments in its Euro-functional subsidiaries.
      As of March 31, 2007, the amount recorded in accumulated other comprehensive
      loss related to the effective portion of the net investment hedge of foreign
      operations was approximately negative $148.0 million. Such amount will be
      included in accumulated other comprehensive loss until the Company liquidates
      its related net investment in its designated foreign operations.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(20) Accounting
      Pronouncements</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Financial
      Instruments</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The FASB
      issued SFAS No. 155, &#8220;Accounting for Certain Hybrid Financial Instruments &#8212; an
      amendment of FASB Statements No. 133 and 140.&#8221; This statement resolves issues
      related to the application of SFAS No. 133, &#8220;Accounting for Derivative
      Instruments and Hedging Activities,&#8221; to beneficial interests in securitized
      assets. The provisions of this statement are to be applied prospectively to
      all
      financial instruments acquired or issued during fiscal years beginning after
      September 15, 2006. The effects of adoption were not significant.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The FASB
      issued SFAS No. 156, &#8220;Accounting for Servicing of Financial Assets &#8212; an
      amendment of FASB Statement No. 140.&#8221; This statement requires that all servicing
      assets and liabilities be initially measured at fair value. The provisions
      of
      this statement are to be applied prospectively to all servicing transactions
      beginning after September 15, 2006. The effects of adoption were not
      significant.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Fair Value
      Measurements</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The FASB
      issued SFAS No. 157, &#8220;Fair Value Measurements.&#8221; This statement defines fair
      value, establishes a framework for measuring fair value and expands disclosures
      about fair value measurements. The provisions of this statement are to generally
      be applied prospectively in fiscal years beginning after November 15, 2007.
      The
      Company is currently evaluating the impact of this statement on its financial
      statements.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Pension and Other
      Postretirement Benefits</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The FASB
      issued SFAS No. 158, &#8220;Employers&#8217; Accounting for Defined Benefit Pension and
      Other Postretirement Plans &#8212; an amendment of FASB Statements No. 87, 88, 106 and
      132(R).&#8221; The Company adopted the funded status recognition provisions of SFAS
      No. 158 as of December 31, 2006.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">This
      statement also requires the measurement of defined benefit plan asset and
      liabilities as of the annual balance sheet date. Currently, the Company measures
      its plan assets and liabilities using an early measurement date of September
      30,
      as allowed by the original provisions of SFAS No. 87, &#8220;Employers&#8217; Accounting for
      Pensions,&#8221; and SFAS No. 106, &#8220;Employers&#8217; Accounting for Postretirement Benefits
      Other Than Pensions.&#8221; The measurement date provisions of SFAS No. 158 are
      effective for fiscal years ending after December 15, 2008. The Company is
      currently evaluating the measurement date provisions of this statement.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong><i>Fair Value
      Option</i></strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The FASB
      issued SFAS No. 159, &#8220;The Fair Value Option for Financial Assets and Financial
      Liabilities &#8211; including an amendment of FASB Statement No. 115.&#8221; This statement
      allows entities to measure eligible financial instruments and certain other
      items at fair value that are not currently required to be measured at fair
      value. The </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-167</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>(20) Accounting
      Pronouncements &#8211; (continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">provisions of this statement
      are effective as of the beginning of an entity&#8217;s first fiscal year beginning
      after November&#160;15, 2007. The Company is currently evaluating the impact of
      this statement on its financial statements.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(21) Supplemental
      Guarantor Condensed Consolidating Financial Statements</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="203">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="37">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="38">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="271">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="335" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31, 2007</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="271">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="271">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="335">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited;
                in millions)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="center"><strong>ASSETS</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                Assets:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">100.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">6.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">224.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">330.4</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                receivable</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">26.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">333.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">2,052.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">2,412.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">14.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">128.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">455.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">599.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">38.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">38.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">33.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">19.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">264.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">317.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">174.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">488.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,034.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,698.0</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-Term
                Assets:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">199.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">284.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">941.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">1,425.9</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">454.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">551.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">1,001.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">2,006.6</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investments
                in subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">3,890.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">2,343.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(6,233.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">237.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">268.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">530.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                long-term assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,782.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,203.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,210.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6,233.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,963.0</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,957.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">3,692.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">5,245.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(6,233.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7,661.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="center"><strong>LIABILITIES
                AND STOCKHOLDERS&#8217;
EQUITY</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                Liabilities:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Short-term
                borrowings</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">11.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">11.5</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable and drafts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">148.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">399.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">1,932.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">2,480.3</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accrued
                liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">310.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">193.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">648.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">1,152.8</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">16.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">16.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                portion of long-term debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">20.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">26.4</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">464.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">593.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,629.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,687.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-Term
                Liabilities:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">2,411.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">20.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">2,431.8</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">21.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">21.6</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intercompany
                accounts, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,219.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">604.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">(1,823.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">169.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">170.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">487.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">827.4</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                long-term liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,799.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">774.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,293.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,280.8</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="271">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Stockholders&#8217;
                Equity</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">692.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,324.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,909.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6,233.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">692.5</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="271">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,957.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">3,692.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">5,245.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(6,233.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7,661.0</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-168</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(21) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="190">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="44">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="37">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="38">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="254">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="353" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31, 2006</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="254">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="68" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="254">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="353">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(in
                millions)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="center"><strong>ASSETS</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                Assets:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cash
                and cash equivalents</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">195.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">4.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">302.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">502.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                receivable</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">12.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">243.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,750.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">2,006.9</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Inventories</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">15.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">136.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">429.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">581.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                assets of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">77.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">217.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">133.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">427.8</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">45.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">29.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">295.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">371.4</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">346.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">631.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,912.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,890.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-Term
                Assets:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Property,
                plant and equipment, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">230.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">284.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">956.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">1,471.7</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Goodwill,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">454.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">551.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">991.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">1,996.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Investments
                in subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">3,691.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">3,257.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(6,948.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">233.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">24.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">234.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">491.8</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                long-term assets</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,610.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4,116.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,181.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6,948.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,960.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,957.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,748.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">5,094.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(6,948.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7,850.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="center"><strong>LIABILITIES
                AND
                STOCKHOLDERS&#8217;<br>EQUITY</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                Liabilities:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Short-term
                borrowings</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">39.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">39.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accounts
                payable and drafts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">157.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">395.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">1,764.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">2,317.4</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Accrued
                liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">322.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">145.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">631.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">1,099.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">60.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">226.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">119.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">405.7</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Current
                portion of long-term debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">6.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">19.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">25.6</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                current liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">545.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">767.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2,574.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,887.3</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 10.35pt">Long-Term
                Liabilities:</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">2,413.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">21.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">2,434.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                liabilities of business held for sale</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">0.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">48.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">48.5</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intercompany
                accounts, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,193.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">503.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="59">
              <div style="MARGIN: 0pt" align="right">(1,696.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">202.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">176.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">499.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">878.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 30pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Total
                long-term liabilities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,809.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">679.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(1,127.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,361.2</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="254">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Stockholders&#8217;
                Equity</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">602.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,300.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">3,647.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6,948.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">602.0</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="254">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,957.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">4,748.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="59" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">5,094.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(6,948.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">7,850.5</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-169</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(21) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="199">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="23">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="35">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="33">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="39">
            </td>
            <td width="16">
            </td>
            <td width="6">
            </td>
            <td width="39">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="266">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="14" valign="bottom" width="340" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Three Months Ended March 31,
                2007</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="266">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="37" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="55" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>guarantors</strong></div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="2" valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="61" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="266">&#160;</td>
            <td valign="bottom" width="17">&#160;</td>
            <td colspan="14" valign="bottom" width="340">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited;
                in millions)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="266">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                sales</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">288.3</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,525.5</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">3,614.7</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(1,022.4</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">4,406.1</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="266">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cost
                of sales</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">298.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">1,499.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">3,319.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">(1,022.4</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">4,095.2</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="266">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Selling,
                general and administrative
                expenses&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">34.1</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">14.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">78.4</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">126.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="266">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Loss
                on divestiture of Interior business</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">(17.2</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">28.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">14.6</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">25.6</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="266">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">21.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">28.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">1.4</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">51.5</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="266">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intercompany
                (income) expense, net</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">(79.6</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">16.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">62.8</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="266">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                expense, net</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="31" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">10.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">13.0</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">25.0</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="266">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                (loss) before income taxes and<br>equity in net income of
                subsidiaries</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">28.3</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(70.9</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">124.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">82.3</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="266">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Provision
                (benefit) for income taxes</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="31">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="47">
              <div style="MARGIN: 0pt" align="right">(9.8</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="44">
              <div style="MARGIN: 0pt" align="right">42.2</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="52">
              <div style="MARGIN: 0pt" align="right">32.4</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="266">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in net income of subsidiaries</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="31" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(21.6</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="47" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(5.9</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="44" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="52" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="266">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income (loss)</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="31" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">49.9</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="47" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(55.2</div>
            </td>
            <td valign="bottom" width="17">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="44" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">82.7</div>
            </td>
            <td valign="bottom" width="17">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(27.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="52" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">49.9</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt">&#160;</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="201">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="34">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="32">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="36">
            </td>
            <td width="15">
            </td>
            <td width="6">
            </td>
            <td width="38">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="268">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="334" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Three Months Ended April 1,
                2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="268">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>guarantors</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="268">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="334">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited;
                in millions)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                sales</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">475.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">1,889.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="7">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">3,152.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">(838.6</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">4,678.5</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cost
                of sales</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">500.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">1,850.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">2,946.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">(838.6</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">4,459.3</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Selling,
                general and administrative
                expenses&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">59.4</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">27.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">78.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">165.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Interest
                expense</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">15.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">23.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">9.1</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">47.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Intercompany
                (income) expense, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(131.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">87.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">44.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                (income) expense, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(31.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">12.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">11.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(8.3</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                (loss) before income taxes, equity<br>in net (income) loss of subsidiaries
                and<br>cumulative effect of a change in<br>accounting principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">63.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(112.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">63.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">14.8</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Provision
                (benefit) for income taxes</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(2.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">1.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">1.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">(0.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Equity
                in net (income) loss of subsidiaries</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">51.5</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(41.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(10.3</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Income
                (loss) before cumulative effect<br>of a change in accounting
                principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">15.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="45">
              <div style="MARGIN: 0pt" align="right">(72.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">62.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="48">
              <div style="MARGIN: 0pt" align="right">10.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8">&#160;</td>
            <td valign="bottom" width="51">
              <div style="MARGIN: 0pt" align="right">15.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Cumulative
                effect of a change in accounting<br>principle</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="45" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="48" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="51" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.9</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="268">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Net
                income</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">17.9</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="45" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">(72.6</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="7" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">62.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="48" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">10.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="51" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">17.9</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-170</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(21) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="195">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="26">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="32">
            </td>
            <td width="16">
            </td>
            <td width="6">
            </td>
            <td width="31">
            </td>
            <td width="16">
            </td>
            <td width="14">
            </td>
            <td width="29">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="38">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="260">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="341" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Three Months Ended March 31,
                2007</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="260">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>guarantors</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="60" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="260">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="341">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited;
                in millions)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash used in operating activities</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">15.2</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(54.2</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(2.8</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(41.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Investing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Additions
                to property, plant and<br>equipment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(2.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(17.7</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(8.7</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(29.2</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Divestiture
                of Interior business</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(6.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(12.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(37.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(57.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">0.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(29.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(28.6</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash used in investing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(8.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(30.3</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(76.1</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(115.1</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt"><strong>Cash
                Flows from Financing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt repayments, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(2.9</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(0.7</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(3.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Short-term
                debt repayments, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(11.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(11.0</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Proceeds
                from exercise of stock options</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">5.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">5.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Decrease
                in drafts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(1.0</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(2.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(10.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="39">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN: 0pt" align="right">(13.5</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in intercompany accounts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(104.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">86.5</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">17.6</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash used in financing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(102.3</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">84.0</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(4.1</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(22.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Effect
                of foreign currency
                translation&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">2.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">7.0</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt"><strong>Net
                Change in Cash and Cash<br>Equivalents</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(95.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">2.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(78.7</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="39">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="50">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(172.3</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents as of<br>Beginning of Period</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">195.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4.0</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">302.9</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="39" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">502.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="260">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents as of<br>End of Period</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">100.0</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">6.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">224.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="39" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="50" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">330.4</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-171</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(21) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="198">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="25">
            </td>
            <td width="12">
            </td>
            <td width="7">
            </td>
            <td width="32">
            </td>
            <td width="15">
            </td>
            <td width="6">
            </td>
            <td width="30">
            </td>
            <td width="15">
            </td>
            <td width="14">
            </td>
            <td width="29">
            </td>
            <td width="12">
            </td>
            <td width="8">
            </td>
            <td width="36">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="264">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="338" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>For
                the Three Months Ended April 1,
                2006</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="264">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Parent</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Guarantors</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="50" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Non-<br>guarantors</strong></div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td colspan="2" valign="bottom" width="58" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Eliminations</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="59" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Consolidated</strong></div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="264">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td colspan="14" valign="bottom" width="338">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center">(unaudited;
                in millions)</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash provided by operating activities</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">154.7</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(41.3</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="9">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(74.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="19">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="bottom" width="10">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">39.4</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                Flows from Investing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Additions
                to property, plant and equipment</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(14.4</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(30.6</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(47.6</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(92.6</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other,
                net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">31.2</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(3.0</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(0.3</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">27.9</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash used in investing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">16.8</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(33.6</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(47.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">(64.7</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt"><strong>Cash
                Flows from Financing Activities:</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">&#160;</td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="49">&#160;</td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Long-term
                debt repayments, net</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(2.1</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(0.1</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(3.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(6.1</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Dividends
                paid</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">(16.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(16.8</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Increase
                in drafts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">7.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">(0.6</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(5.9</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">1.1</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Change
                in intercompany accounts</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(152.5</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">78.3</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">74.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: white 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10pt">Net
                cash used in financing activities</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(163.8</div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">77.6</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">64.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(21.8</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 0.5pt solid;">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt">Effect
                of foreign currency translation</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">3.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">7.0</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -18pt" align="right">10.7</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Net
                Change in Cash and Cash Equivalents</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6">&#160;</td>
            <td valign="bottom" width="34">
              <div style="MARGIN: 0pt" align="right">7.7</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="43">
              <div style="MARGIN: 0pt" align="right">6.4</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9">&#160;</td>
            <td valign="bottom" width="41">
              <div style="MARGIN: 0pt" align="right">(50.5</div>
            </td>
            <td valign="bottom" width="21">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="bottom" width="19">&#160;</td>
            <td valign="bottom" width="38">&#160;</td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10">&#160;</td>
            <td valign="bottom" width="49">
              <div style="MARGIN: 0pt" align="right">(36.4</div>
            </td>
            <td valign="bottom" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents as of Beginning of Period</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="34" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">38.6</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="43" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4.8</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="41" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">164.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="38" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="49" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">207.6</div>
            </td>
            <td valign="bottom" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="264">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt"><strong>Cash
                and Cash Equivalents as of End of Period</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="34" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">46.3</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="43" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">11.2</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="9" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="41" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">113.7</div>
            </td>
            <td valign="bottom" width="21">&#160;</td>
            <td valign="bottom" width="19" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="38" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">&#8212;</div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="10" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="49" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">171.2</div>
            </td>
            <td valign="bottom" width="4" style="border-bottom: #ccffcc 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Basis
      of
      Presentation &#8212; Certain of the Company&#8217;s wholly-owned subsidiaries (the
&#8220;Guarantors&#8221;) have unconditionally fully guaranteed, on a joint and several
      basis, the punctual payment when due, whether at stated maturity, by
      acceleration or otherwise, of all of the Company&#8217;s obligations under the Primary
      Credit Facility and the indentures governing the Company&#8217;s senior notes,
      including the Company&#8217;s obligations to pay principal, premium, if any, and
      interest with respect to the senior notes. The senior notes consist of $300
      million aggregate principal amount of 8.50% senior notes due 2013, $600 million
      aggregate principal amount of 8.75% senior notes due 2016, $399 million
      aggregate principal amount of 5.75% senior notes due 2014, Euro 56 million
      aggregate principal amount of 8.125% senior notes due 2008, $41 million
      aggregate principal amount of 8.11% senior notes due 2009 and $1 million
      aggregate principal amount of zero-coupon convertible senior notes due 2022.
      The
      Guarantors under the indentures are currently Lear Automotive Dearborn, Inc.,
      Lear Automotive (EEDS) Spain S.L., Lear Corporation EEDS and Interiors, Lear
      Corporation (Germany) Ltd., Lear Corporation Mexico, S. de R.L. de C.V., Lear
      Operations Corporation and Lear Seating Holdings Corp. #50. Lear Automotive
      Dearborn, Inc. became a Guarantor under the indentures effective April 25,
      2006.
      In lieu of providing separate audited financial statements for the Guarantors,
      the Company has included the audited supplemental guarantor condensed
      consolidating financial statements above. These financial statements reflect
      the
      guarantors listed above for all periods presented. Management does not believe
      that separate financial statements of the Guarantors are material to investors.
      Therefore, separate financial statements and other disclosures concerning the
      Guarantors are not presented.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">As of
      December 31, 2006 and for the three months ended April 1, 2006, the supplemental
      guarantor condensed consolidating financial statements have been restated to
      reflect certain changes to the equity investments of guarantor
      subsidiaries.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Distributions
      &#8212; There are no significant restrictions on the ability of the Guarantors to make
      distributions to the Company.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Selling,
      General and Administrative Expenses &#8212; During the three months ended March 31,
      2007 and April 1, 2006, the Parent allocated $2.5 million and $12.9 million,
      respectively, of corporate selling, general and administrative expenses to
      its
      operating subsidiaries. The allocations were based on various factors, which
      estimate </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-172</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
    <div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt">
<p align="left"><a href="#index"><font size="2" face="Times New Roman, Times, serif"><strong>Back
    to Index</strong></font></a></p>
<br></div>
    <div style="MARGIN: 0pt" align="center"><strong>LEAR CORPORATION AND
      SUBSIDIARIES</strong></div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 6.65pt"><strong>(21) Supplemental
      Guarantor Condensed Consolidating Financial Statements &#8211;
(continued)</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt">usage of particular
      corporate functions, and in certain instances, other relevant factors, such
      as
      the revenues or the number of employees of the Company&#8217;s subsidiaries.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Long-term
      debt of the Parent and the Guarantors &#8212; A summary of long-term debt of the
      Parent and the Guarantors on a combined basis is shown below (in
      millions):</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="239">
            </td>
            <td width="12">
            </td>
            <td width="5">
            </td>
            <td width="30">
            </td>
            <td width="12">
            </td>
            <td width="6">
            </td>
            <td width="40">
            </td>
            <td width="3">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="319">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td colspan="2" valign="bottom" width="46" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>March
                31,<br>2007</strong></div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td colspan="2" valign="top" width="62" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>December
                31,<br>2006</strong></div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="319">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="bottom" width="40">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="8">&#160;</td>
            <td valign="bottom" width="53">&#160;</td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="319">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Amended
                and restated primary credit
                facility&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="6">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">997.0</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="8">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">997.0</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="319">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Senior
                notes</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN: 0pt" align="right">1,415.7</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">1,417.6</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="319">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Other
                long-term debt</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4.5</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">4.6</div>
            </td>
            <td valign="top" width="4" style="border-bottom: #ccffcc 0.5pt solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="319">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="6">&#160;</td>
            <td valign="bottom" width="40">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt" align="right">2,417.2</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="8">&#160;</td>
            <td valign="bottom" width="53">
              <div style="MARGIN: 0pt" align="right">2,419.2</div>
            </td>
            <td valign="top" width="4">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="bottom" width="319">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">Less
                &#8212; current portion</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="6" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="40" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6.0</div>
            </td>
            <td valign="top" width="16">
              <div style="MARGIN: 0pt">)</div>
            </td>
            <td valign="top" width="8" style="border-bottom: #000000 0.5pt solid;">&#160;</td>
            <td valign="bottom" width="53" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="right">(6.0</div>
            </td>
            <td valign="top" width="4">
              <div style="MARGIN: 0pt">)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="bottom" width="319">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="bottom" width="6" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt; LINE-HEIGHT: 10.35pt">$</div>
            </td>
            <td valign="bottom" width="40" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,411.2</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="8" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt">$</div>
            </td>
            <td valign="bottom" width="53" style="border-bottom: #000000 3pt double;">
              <div style="MARGIN: 0pt" align="right">2,413.2</div>
            </td>
            <td valign="top" width="4" style="border-bottom: white 3pt double;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      obligations of foreign subsidiary borrowers under the Primary Credit Facility
      are guaranteed by the Parent.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">For more
      information on the above indebtedness, see Note 9, &#8220;Long-Term Debt.&#8221;</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">F-173</div>
    <div style="MARGIN: 0pt"><br></div>

    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

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  to Table of Contents</a></strong></font><br>
</div>
    <div style="BORDER-TOP: #000000 12pt double; MARGIN: 0pt; PADDING-TOP: 3pt"><br></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><font style="FONT-FAMILY: Times New Roman" color="#000000">Until
      &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
      200_, all dealers that effect transactions in these securities, whether or
      not
      participating in this exchange offer, may be required to deliver a prospectus.
      Each broker-dealer that receives new notes for its own account pursuant to
      the
      exchange offer must acknowledge that it will deliver a prospectus in connection
      with any resale of such new notes.</font></div>
    <div style="MARGIN-TOP: 122.5pt; FONT-SIZE: 10.5pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 12.5pt" align="center">___________________</div>
    <div style="MARGIN-TOP: 10.5pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: 14pt" align="center"><strong>PROSPECTUS</strong></div>
    <div style="FONT-SIZE: 10.5pt; MARGIN: 0pt; LINE-HEIGHT: 12.5pt" align="center">___________________</div>
    <div style="MARGIN-TOP: 110pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: normal" align="center"><strong>AMERICAN
      REAL ESTATE PARTNERS, L.P.<br></strong><font style="FONT-FAMILY: Times New (W1)"><small>(Exact name
      of co-registrant as
      specified in its charter)</small></font></div>
    <div style="MARGIN-TOP: 16pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: normal" align="center"><strong>AMERICAN
      REAL ESTATE FINANCE CORP.<br></strong><font style="FONT-FAMILY: Times New (W1)"><small>(Exact name
      of co-registrant as
      specified in its charter)</small></font></div>
    <div style="MARGIN-TOP: 16pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; LINE-HEIGHT: normal" align="center"><strong>AMERICAN
      REAL ESTATE HOLDINGS LIMITED
      PARTNERSHIP<br></strong><small>(Exact name of registrant of guarantee as
      specified in its charter)</small></div>
    <div style="MARGIN-TOP: 75pt; MARGIN-BOTTOM: 0pt" align="center"><strong>Offer
      to
      exchange our 7&#8539;% Senior Notes due 2013, which have been registered<br>under the
      Securities Act of 1933, for any and all of our outstanding<br>7&#8539;% Senior Notes
      due 2013.</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt; PADDING-BOTTOM: 3pt; BORDER-BOTTOM: #000000 12pt double" align="center"><br></div>
    <div style="MARGIN: 0pt" align="center"><br></div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center"><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"><font size="2" face="Times New Roman, Times, serif"><strong><a href="#toc">Back
    to Table of Contents</a></strong></font></p>
  <p><strong>PART II</strong></p>
</div>
    <div style="MARGIN-TOP: 13.35pt; MARGIN-BOTTOM: 0pt" align="center"><strong>INFORMATION
      NOT REQUIRED IN PROSPECTUS</strong></div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Item 20.
      Indemnification of Directors and Officers.</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Indemnification
      Under the Delaware Limited Partnership Act and the American Real Estate Partners
      L.P. Limited Partnership Agreement</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREP
      is
      organized under the laws of Delaware. Section 17-108 of the Delaware Act,
      provides that a limited partnership may, and shall have the power to, indemnify
      and hold harmless any partners or other persons from and against any and all
      claims and demands whatsoever, subject to such standards and restrictions set
      forth in the partnership agreement.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">Section
      6.15 of the AREP partnership agreement, dated as of May&#160;12, 1987, as
      amended, provides that the general partner, its affiliates, and all officers,
      directors, employees and agents of the general partner and its affiliates
      (individually, an &#8220;Indemnitee&#8221;), to the fullest extent permitted by law, will be
      indemnified and held harmless from and against any and all losses, claims,
      demands, costs, damages, liabilities, joint and several, expenses of any nature
      (including attorneys&#8217; fees and disbursements), judgments, fines, settlements,
      and other amounts arising from any and all claims, demands, actions, suits
      or
      proceedings, whether civil, criminal, administrative or investigative, in which
      the Indemnitee may be involved, or threatened to be involved, as a party or
      otherwise by reason of its status as (x)&#160;the general partner or an
      affiliate thereof or (y) a partner, shareholder, director, officer, employee
      or
      agent of the general partner or an affiliate thereof or (z) a person serving
      at
      the request of the partnership in another entity in a similar capacity, which
      relate to, arise out of or are incidental to the partnership, its property,
      business or affairs, including, without limitation, liabilities under the
      federal and state securities laws, regardless of whether the Indemnitee
      continues to be a general partner, an affiliate, or an officer, director,
      employee or agent of the general partner or of an affiliate thereof at the
      time
      any such liability or expense is paid or incurred, if (i) the Indemnitee acted
      in good faith and in a manner it believed to be in, or not opposed to, the
      best
      interests of the partnership, and, with respect to any criminal proceeding,
      had
      no reasonable cause to believe its conduct was unlawful and (ii) the
      Indemnitee&#8217;s conduct did not constitute willful misconduct. The partnership
      agreement further provides that an Indemnitee shall not be denied
      indemnification in whole or in part under Section 6.15 by reason of the fact
      that the Indemnitee had an interest in the transaction with respect to which
      the
      indemnification applies if the transaction was otherwise permitted by the terms
      of the partnership agreement. Any indemnification under Section 6.15 shall
      be
      satisfied solely out of the assets of the partnership.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt"><i>Indemnification
      Under the Delaware General Corporation Law and the Certificate of Incorporation
      and Bylaws of AREP Finance</i></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">AREP
      Finance, the co-issuer of the notes, is a corporation incorporated under the
      laws of the State of Delaware. Section 145 of the Delaware General Corporation
      Law provides that a corporation may indemnify directors and officers as well
      as
      other employees and individuals against expenses (including attorneys&#8217; fees),
      judgments, fines and amounts paid in settlement actually and reasonably incurred
      by such person in connection with any threatened, pending or completed actions,
      suits or proceedings in which such person is made a party by reason of such
      person being or having been a director, officer, employee of or agent to the
      Registrants. The statute provides that it is not exclusive of other rights
      to
      which those seeking indemnification may be entitled under any by-law, agreement,
      vote of stockholders or disinterested directors or otherwise.</div>
    <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">II-1</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 6.65pt; PAGE-BREAK-BEFORE: always">
  <p><strong><font size="2" face="Times New Roman, Times, serif"><strong><a href="#toc">Back
    to Table of Contents</a></strong></font></strong></p>
  <p><strong>Item 21. Exhibits</strong></p>
</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="35">
            </td>
            <td width="15">
            </td>
            <td width="12">
            </td>
            <td width="405">
            </td>
          </tr>
          <tr>
            <td colspan="2" valign="bottom" width="66" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt"><strong>Exhibit No.</strong></div>
            </td>
            <td valign="bottom" width="16">&#160;</td>
            <td valign="bottom" width="540" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt" align="center"><strong>Description</strong></div>
            </td>
          </tr>
          <tr>
            <td colspan="2" valign="bottom" width="66">
              <div style="MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="16">
              <div style="MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="bottom" width="540">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">4.1</div>
            </td>
            <td valign="top" width="20">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Indenture, dated
                as of
                February&#160;7, 2005, among American Real Estate Partners, L.P., American
                Real Estate Finance Corp., AREH, as guarantor and Wilmington Trust
                Company, as Trustee (incorporated by reference to Exhibit&#160;4.9 to
                AREP&#8217;s Form 8-K (SEC File No.&#160;1-9516), filed on February&#160;10,
                2005).</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">4.2</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Form of 7
                1/8%&#160;Senior Note due 2013 (incorporated by reference to
                Exhibit&#160;4.9 to AREP&#8217;s Form 8-K (SEC File No.&#160;1-9516), filed on
                February&#160;10, 2005).</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">4.3</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Registration Rights
                Agreement, dated as of January 17, 2007, among American Real Estate
                Partners, L.P., American Real Estate Finance Corp., AREH and Jefferies
                &amp; Company (incorporated by reference to Exhibit&#160;4.3 to AREP&#8217;s
                Form 8-K (SEC File No.&#160;1-9516), filed on January 19,
                2007).</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">5.1</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Opinion of Proskauer
                Rose LLP.(1)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">12.1</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Ratio of earnings
                to
                fixed charges.</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">23.1</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Consent of Grant
                Thornton LLP.</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">23.2</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Consent of Grant
                Thornton LLP.</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">23.3</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Consent of Grant
                Thornton LLP.</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">23.4</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Consent of KPMG
                LLP.</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">23.5</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Consent of KPMG
                LLP.</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">23.6</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Consent of KPMG
                LLP.</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">23.7</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Consent of Ernst
&amp;
                Young LLP.</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">23.8</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Consent of Proskauer
                Rose LLP (included in Exhibit 5.1).(1)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">24.1</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Power of Attorney
                (included on the signature pages to this S-4).</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">25.1</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Statement of
                Eligibility of Trustee.(1)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">99.1</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Letter of
                Transmittal.(1)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">99.2</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Notice of Guaranteed
                Delivery.(1)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">99.3</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Letter to
                Clients.(1)</div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">99.4</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Letter to
                Brokers.(1)</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td valign="top" width="46">
              <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 2.5pt; TEXT-INDENT: -6pt" align="right">99.5</div>
            </td>
            <td valign="top" width="20">&#160;</td>
            <td valign="top" width="16">&#160;</td>
            <td valign="top" width="540">
              <div style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 2.5pt">Form of Exchange
                Agent
                Agreement by and between AREP and Wilmington Trust
                Company.(1)</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="FONT-SIZE: 11pt; MARGIN: 0pt; LINE-HEIGHT: 13pt">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: -12pt; TEXT-INDENT: -18pt">(1)</div>
    <div style="MARGIN-TOP: 0pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 2.5pt">To be
      filed by amendment.</div>
    <div style="MARGIN-TOP: 10pt; MARGIN-BOTTOM: 0pt"><strong>Item 22.
      Undertakings</strong></div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">The
      undersigned registrants hereby undertake:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(1)
      To file, during any period in which offers or sales are being made, a
      post-effective amendment to this registration statement</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(i)
      To include any prospectus required by Section 10(a)(3) of the Securities
      Act;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(ii)
      To reflect in the prospectus any facts or events arising after the effective
      date of the Registration Statement (or the most recent post-effective amendment
      thereof) which, individually or in the aggregate, represent a fundamental change
      in the information set forth in the Registration Statement. Notwithstanding
      the
      foregoing, any increase or decrease in volume of securities offered (if the
      total dollar value of securities offered would not exceed that which was
      registered) and any deviation from the low or high end of the estimated maximum
      offering range may be reflected in the form of prospectus filed with the
      commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
      and price represent no more than a 20% change in the maximum aggregate offering
      price set forth in the &#8220;Calculation of Registration Fee&#8221; table in the effective
      Registration Statement; and</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">II-2</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

        <p style="page-break-before: always"><font size="2" face="Times New Roman, Times, serif"><strong><a href="#toc">Back
  to Table of Contents</a></strong></font></p>

<div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(iii)
      To include any material information with respect to the plan of distribution
      not
      previously disclosed in the Registration Statement or any material change to
      such information in the Registration Statement; provided, however, that
      paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required
      to be included in a post-effective amendment by those paragraphs is contained
      in
      periodic reports filed with or furnished to the SEC by the registrants pursuant
      to Section 13 or 15(d) of the Exchange Act that are incorporated by reference
      in
      the registration statement, or is contained in a form of prospectus filed
      pursuant to Rule 424(b) that is a part of the Registration Statement.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(2)
      That, for the purpose of determining any liability under the Securities Act,
      each such post-effective amendment shall be deemed to be a new registration
      statement relating to the securities offered therein, and the offering of such
      securities at that time shall be deemed to be the initial bona fide offering
      thereof.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(3)
      To remove from registration by means of a post-effective amendment any of the
      securities being registered that remain unsold at the termination of the
      offering.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(4)
      That, for the purpose of determining liability under the Securities Act to
      any
      purchaser:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(a)
      If the registrant is relying on Rule 430B:</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(i)
      Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be
      deemed to be part of the registration statement as of the date the filed
      prospectus was deemed part of and included in the Registration Statement;
      and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 54pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(ii)
      Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
      (b)(7) as part of a registration statement in reliance on Rule 430B relating
      to
      an offering made pursuant to Rule 415(a)(l)(i), (vii) or (x) for the purpose
      of
      providing the information required by section 10(a) of the Securities Act shall
      be deemed to be part of and included in the Registration Statement as of the
      earlier of the date such form of prospectus is first used after effectiveness
      or
      the date of the first contract of sale of securities in the offering described
      in the prospectus. As provided in Rule 430B, for liability purposes of the
      issuer and any person that is at that date an underwriter, such date shall
      be
      deemed to be a new effective date of the Registration Statement relating to
      the
      securities in the Registration Statement to which that prospectus relates,
      and
      the offering of such securities at that time shall be deemed to be the initial
      bona fide offering thereof. Provided, however, that no statement made in a
      registration statement or prospectus that is part of the Registration Statement
      or made in a document incorporated or deemed incorporated by reference into
      the
      Registration Statement or prospectus that is part of the Registration Statement
      will, as to a purchaser with a time of contract of sale prior to such effective
      date, supersede or modify any statement that was made in the Registration
      Statement or prospectus that was part of the Registration Statement or made
      in
      any such document immediately prior to such effective date; or</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(b)
      If the registrant is subject to Rule 430C, each prospectus filed pursuant to
      Rule 424(b) as part of a Registration Statement relating to an offering, other
      than Registration Statements relying on Rule 430B or other than prospectuses
      filed in reliance on Rule 430A, shall be deemed to be part of and included
      in
      the Registration Statement as of the date it is first used after effectiveness.
      Provided, however, that no statement made in a Registration Statement or
      prospectus that is part of the Registration Statement or made in a document
      incorporated or deemed incorporated by reference into the Registration Statement
      or prospectus that is part of the Registration Statement will, as to a purchaser
      with a time of contract of sale prior to such first use, supersede or modify
      any
      statement that was made in the Registration Statement or prospectus that was
      part of the Registration Statement or made in any such document immediately
      prior to such date of first use.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(5)
      That, for the purpose of determining liability of the registrant under the
      Securities Act to any purchaser in the initial distribution of the securities,
      in a primary offering of securities of the undersigned registrants pursuant
      to
      the Registration Statement, regardless of the underwriting method used to sell
      the securities to the purchaser, if the securities are offered or sold to such
      purchaser by means of any of the following communications, the undersigned
      registrants will be a seller to the purchaser and will be considered to offer
      or
      sell such securities to such purchaser:</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt"><br><br></div>
    <div style="MARGIN: 0pt" align="center">II-3</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">
<p style="page-break-before: always"><font size="2" face="Times New Roman, Times, serif"><strong><a href="#toc">Back
  to Table of Contents</a></strong></font></p>
  <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(a)
      Any preliminary prospectus or prospectus of the undersigned registrant relating
      to the offering required to be filed pursuant to Rule 424;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(b)
      Any free writing prospectus relating to the offering prepared by or on behalf
      of
      the undersigned registrants or used or referred to by the undersigned
      registrant;</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(c)
      The portion of any other free writing prospectus relating to the offering
      containing material information about the undersigned registrant or its
      securities provided by or on behalf of the undersigned registrant; and</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 36pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(d)
      Any other communication that is an offer in the offering made by the undersigned
      registrant to the purchaser.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(6)
      That, for purposes of determining any liability under the Securities Act, each
      filing of the registrant&#8217;s annual report pursuant to Section 13(a) or 15(d) of
      the Exchange Act (and, where applicable, each filing of an employee benefit
      plan&#8217;s annual report pursuant to Section 15(d) of the Exchange Act) that is
      incorporated by reference in the Registration Statement shall be deemed to
      be a
      new registration statement relating to the securities offered therein, and
      the
      offering of such securities at that time shall be deemed to be the initial
      bona
      fide offering thereof.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(7)
      Insofar as indemnification for liabilities arising under the Securities Act
      may
      be permitted to directors, officers and controlling persons of the registrant
      pursuant to the foregoing provisions, or otherwise, the registrants have been
      advised that in the opinion of the SEC such indemnification is against public
      policy as expressed in the Securities Act and is, therefore, unenforceable.
      In
      the event that a claim for indemnification against such liabilities (other
      than
      the payment by the registrant of expenses incurred or paid by a director,
      officer of controlling person of the registrant in the successful defense of
      any
      action, suit or proceeding) is asserted by such director, officer or controlling
      person in connection with the securities being registered, the registrants
      will,
      unless in the opinion of its counsel the matter has been settled by controlling
      precedent, submit to a court of appropriate jurisdiction the question whether
      such indemnification by it is against public policy as expressed in the
      Securities Act and will be governed by the final adjudication of such
      issue.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(8)
      For purposes of determining any liability under the Securities Act, the
      information omitted from the form of prospectus filed as part of a registration
      statement in reliance upon Rule 430A and contained in the form of prospectus
      filed by the registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under
      the
      Securities Act shall be deemed to be part of the Registration Statement as
      of
      the time it was declared effective.</div>
    <div style="MARGIN-TOP: 6.65pt; PADDING-LEFT: 18pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">(9)
      For the purpose of determining any liability under the Securities Act, each
      post-effective amendment that contains a form of prospectus shall be deemed
      to
      be a new registration statement relating to the securities offered therein,
      and
      the offering of such securities at that time shall be deemed to be the
      initial<i> bona fide</i> offering thereof.</div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt" align="center">II-4</div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"><font size="2" face="Times New Roman, Times, serif"><strong><a href="#toc">Back
    to Table of Contents</a></strong></font></p>
  <p><strong>SIGNATURES</strong></p>
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Pursuant
      to
      the requirements of the Securities Act of 1933, as amended, the registrant
      certifies that it has reasonable grounds to believe that it meets all of the
      requirements for filing a Form S-4 and has duly caused this Registration
      Statement to be signed on its behalf by the undersigned, thereunto duly
      authorized, in New York, New York on June 21, 2007.</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="205">
            </td>
            <td width="16">
            </td>
            <td width="246">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="273">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td colspan="2" valign="bottom" width="350">
              <div style="MARGIN: 0pt">AMERICAN REAL ESTATE PARTNERS, L.P.</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="273">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="328">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="273">&#160;</td>
            <td valign="top" width="22">
              <div style="MARGIN: 0pt">By:&#160;</div>
            </td>
            <td valign="top" width="328">
              <div style="MARGIN: 0pt">American Property Investors, Inc., its general
                partner</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="273">&#160;</td>
            <td valign="top" width="22">&#160;</td>
            <td valign="top" width="328">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="273">&#160;</td>
            <td valign="top" width="22">
              <div style="MARGIN: 0pt">By:&#160;</div>
            </td>
            <td valign="top" width="328" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">/s/ Keith A. Meister</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="273">&#160;</td>
            <td valign="top" width="22">&#160;</td>
            <td valign="top" width="328">
              <div style="MARGIN: 0pt">Keith A. Meister<br>Principal Executive Officer
                and Vice Chairman of the Board</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">KNOW
      BY
      ALL MEN BY THESE PRESENTS that each person whose signature appears below hereby
      constitutes and appoints Keith A. Meister as his true and lawful
      attorney-in-fact and agent with full power of substitution and resubstitution,
      to act for him and in his name, place and stead, in any and all capacities,
      to
      sign any or all amendments (including pre-effective and post-effective
      amendments) to this Registration Statement, including any subsequent
      registration statement for the same offering that may be filed under Rule 462(b)
      and to file the same, with all exhibits thereto, and other documents in
      connection therewith, with the Securities and Exchange Commission, granting
      unto
      said attorney-in-fact and agent full power and authority to do and perform
      each
      and every act and thing requisite and necessary to be done in and about the
      premises, as fully to all intents and purposes as he might or could do in
      person, hereby ratifying and confirming all that said attorney-in-fact and
      agent
      or his substitute may lawfully do or cause to be done by virtue hereof.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Pursuant
      to
      the requirements of the Securities Act of 1933, as amended, this Registration
      Statement has been signed by the following persons in the capacities and on
      the
      dates indicated:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="154">
            </td>
            <td width="10">
            </td>
            <td width="213">
            </td>
            <td width="10">
            </td>
            <td width="78">
            </td>
          </tr>
          <tr>
            <td valign="top" width="206" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Signature</strong></div>
            </td>
            <td valign="top" width="14">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="top" width="284" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Title</strong></div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Date</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">/s/
                Keith
                A. Meister</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Principal Executive Officer</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="MARGIN: 0pt">Keith A. Meister</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">
              <div style="MARGIN: 0pt">and Vice Chairman of the Board <br>(Principal
                Executive Officer)</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">/s/
                Andrew Skobe</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Chief Financial Officer</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">Andrew
                Skobe</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">
              <div style="MARGIN: 0pt">(Principal Financial Officer) and <br>Chief
                Accounting Officer</div>
              <div style="MARGIN: 0pt">(Principal Accounting Officer)</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">/s/
                Jack G. Wasserman</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Director</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">Jack
                G.
                Wasserman</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">/s/
                William A. Leidesdorf</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Director</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">William
                A.
                Leidesdorf</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">/s/
                James L. Nelson</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Director</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">James
                L.
                Nelson</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">/s/
                Vincent J. Intrieri</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Director</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">Vincent
                J.
                Intrieri</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">&#160;
                </div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Chairman of the Board</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center"></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">Carl
                C.
                Icahn</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"><font size="2" face="Times New Roman, Times, serif"><strong><a href="#toc">Back
    to Table of Contents</a></strong></font></p>
  <p><strong>SIGNATURES</strong></p>
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Pursuant
      to
      the requirements of the Securities Act of 1933, as amended, the registrant
      certifies that it has reasonable grounds to believe that it meets all of the
      requirements for filing a Form S-4 and has duly caused this Registration
      Statement to be signed on its behalf by the undersigned, thereunto duly
      authorized, in New York, New York on June 21, 2007.</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="205">
            </td>
            <td width="16">
            </td>
            <td width="246">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="273">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td colspan="2" valign="bottom" width="350">
              <div style="MARGIN: 0pt">AMERICAN REAL ESTATE FINANCE CORP.</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="273">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="328">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="273">&#160;</td>
            <td valign="top" width="22">
              <div style="MARGIN: 0pt">By:&#160;</div>
            </td>
            <td valign="top" width="328" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">/s/ Keith A. Meister</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="273">&#160;</td>
            <td valign="top" width="22">&#160;</td>
            <td valign="top" width="328">
              <div style="MARGIN: 0pt">Keith A. Meister<br>Principal Executive Officer
                and Vice Chairman of the Board</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">KNOW
      BY
      ALL MEN BY THESE PRESENTS that each person whose signature appears below hereby
      constitutes and appoints Keith A. Meister as his true and lawful
      attorney-in-fact and agent with full power of substitution and resubstitution,
      to act for him and in his name, place and stead, in any and all capacities,
      to
      sign any or all amendments (including pre-effective and post-effective
      amendments) to this Registration Statement, including any subsequent
      registration statement for the same offering that may be filed under Rule 462(b)
      and to file the same, with all exhibits thereto, and other documents in
      connection therewith, with the Securities and Exchange Commission, granting
      unto
      said attorney-in-fact and agent full power and authority to do and perform
      each
      and every act and thing requisite and necessary to be done in and about the
      premises, as fully to all intents and purposes as he might or could do in
      person, hereby ratifying and confirming all that said attorney-in-fact and
      agent
      or his substitute may lawfully do or cause to be done by virtue hereof.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Pursuant
      to
      the requirements of the Securities Act of 1933, as amended, this Registration
      Statement has been signed by the following persons in the capacities and on
      the
      dates indicated:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="154">
            </td>
            <td width="10">
            </td>
            <td width="213">
            </td>
            <td width="10">
            </td>
            <td width="78">
            </td>
          </tr>
          <tr>
            <td valign="top" width="206" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Signature</strong></div>
            </td>
            <td valign="top" width="14">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="top" width="284" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Title</strong></div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Date</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">/s/
                Keith
                A. Meister</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Principal Executive Officer</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="MARGIN: 0pt">Keith A. Meister</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">
              <div style="MARGIN: 0pt">and Vice Chairman of the Board <br>(Principal
                Executive Officer)</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">/s/
                Andrew Skobe</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Chief Financial Officer</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">Andrew
                Skobe</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">
              <div style="MARGIN: 0pt">(Principal Financial Officer) and <br>Chief
                Accounting Officer</div>
              <div style="MARGIN: 0pt">(Principal Accounting Officer)</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">/s/
                Jack G. Wasserman</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Director</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">Jack
                G.
                Wasserman</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">/s/
                William A. Leidesdorf</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Director</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">William
                A.
                Leidesdorf</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">/s/
                James L. Nelson</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Director</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">James
                L.
                Nelson</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">/s/
                Vincent J. Intrieri</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Director</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">Vincent
                J.
                Intrieri</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">&#160;</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Chairman of the Board</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center"></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">Carl
                C.
                Icahn</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="MARGIN: 0pt" align="center"><br><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <div style="MARGIN: 0pt"><br></div>
    <hr style="PADDING-BOTTOM: 7.2pt; PADDING-TOP: 7.2pt" noshade size="1">

<div style="PAGE-BREAK-BEFORE: always; MARGIN: 0pt" align="center">
  <p align="left"><font size="2" face="Times New Roman, Times, serif"><strong><a href="#toc">Back
    to Table of Contents</a></strong></font></p>
  <p><strong>SIGNATURES</strong></p>
</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Pursuant
      to
      the requirements of the Securities Act of 1933, as amended, the registrant
      certifies that it has reasonable grounds to believe that it meets all of the
      requirements for filing a Form S-4 and has duly caused this Registration
      Statement to be signed on its behalf by the undersigned, thereunto duly
      authorized, in New York, New York on June 21, 2007.</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="177">
            </td>
            <td width="16">
            </td>
            <td width="273">
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="236">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td colspan="2" valign="bottom" width="387">
              <div style="MARGIN: 0pt">AMERICAN REAL ESTATE HOLDINGS LIMITED
                PARTNERSHIP</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="236">&#160;</td>
            <td valign="bottom" width="22">&#160;</td>
            <td valign="bottom" width="364">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="236">&#160;</td>
            <td valign="top" width="22">
              <div style="MARGIN: 0pt">By:&#160;</div>
            </td>
            <td valign="top" width="364" style="border-bottom: #000000 0.5pt solid;">
              <div style="MARGIN: 0pt">/s/ Keith A. Meister</div>
            </td>
          </tr>
          <tr>
            <td valign="bottom" width="236">&#160;</td>
            <td valign="top" width="22">&#160;</td>
            <td valign="top" width="364">
              <div style="MARGIN: 0pt">Keith A. Meister<br>Principal Executive Officer
                and Vice Chairman of the Board</div>
            </td>
          </tr>

      </table>
    </div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: 18pt">KNOW
      BY
      ALL MEN BY THESE PRESENTS that each person whose signature appears below hereby
      constitutes and appoints Keith A. Meister as his true and lawful
      attorney-in-fact and agent with full power of substitution and resubstitution,
      to act for him and in his name, place and stead, in any and all capacities,
      to
      sign any or all amendments (including pre-effective and post-effective
      amendments) to this Registration Statement, including any subsequent
      registration statement for the same offering that may be filed under Rule 462(b)
      and to file the same, with all exhibits thereto, and other documents in
      connection therewith, with the Securities and Exchange Commission, granting
      unto
      said attorney-in-fact and agent full power and authority to do and perform
      each
      and every act and thing requisite and necessary to be done in and about the
      premises, as fully to all intents and purposes as he might or could do in
      person, hereby ratifying and confirming all that said attorney-in-fact and
      agent
      or his substitute may lawfully do or cause to be done by virtue hereof.</div>
    <div style="MARGIN-TOP: 6.65pt; MARGIN-BOTTOM: 6.65pt; TEXT-INDENT: 18pt">Pursuant
      to
      the requirements of the Securities Act of 1933, as amended, this Registration
      Statement has been signed by the following persons in the capacities and on
      the
      dates indicated:</div>
    <div>
      <table align="center" cellspacing="0" style="FONT-SIZE: 10pt">

          <tr>
            <td width="154">
            </td>
            <td width="10">
            </td>
            <td width="213">
            </td>
            <td width="10">
            </td>
            <td width="78">
            </td>
          </tr>
          <tr>
            <td valign="top" width="206" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Signature</strong></div>
            </td>
            <td valign="top" width="14">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt" align="center"><strong>&#160;&#160;&#160;&#160;&#160;</strong></div>
            </td>
            <td valign="top" width="284" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Title</strong></div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104" style="border-bottom: #000000 0.5pt solid;">
              <div style="FONT-SIZE: 8pt; MARGIN: 0pt; LINE-HEIGHT: 10pt" align="center"><strong>Date</strong></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="MARGIN-TOP: 1.65pt; PADDING-LEFT: 6pt; MARGIN-BOTTOM: 0pt; TEXT-INDENT: -6pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206" style="border-bottom: #000000 0.5pt solid;">
              <div style="PADDING-LEFT: 6pt; MARGIN: 0pt; TEXT-INDENT: -6pt">/s/
                Keith
                A. Meister</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Principal Executive Officer</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="206">
              <div style="MARGIN: 0pt">Keith A. Meister</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">
              <div style="MARGIN: 0pt">and Vice Chairman of the Board <br>(Principal
                Executive Officer)</div>
            </td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="206">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="284">&#160;</td>
            <td valign="top" width="14">&#160;</td>
            <td valign="top" width="104">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="206">
              <div style="PADDING-LEFT: 6pt; PADDING-BOTTOM: 3pt; MARGIN: 0pt; TEXT-INDENT: -6pt; BORDER-BOTTOM: #000000 0.5pt solid">/s/
                Andrew Skobe</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="284">
              <div style="MARGIN: 0pt">Chief Financial Officer</div>
            </td>
            <td valign="bottom" width="14">&#160;</td>
            <td valign="bottom" width="104">
              <div style="MARGIN: 0pt" align="center">June 21, 2007</div>
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<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>2
<FILENAME>v077571_ex12-1.htm
<TEXT>
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            <td align="left" colspan="2" valign="bottom" width="6%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">22,036
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">34,407
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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          <tr>
            <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fixed
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            <td width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">27,213</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">115,307
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">94,795
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            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">47,671
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21,520
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">27,747
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="27%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amortization
                of capitalized interest</font></div>
            </td>
            <td width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">60
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">59
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">206
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">256
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">257
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="27%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                Earnings</font></div>
            </td>
            <td width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">98,866</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7,930</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">70,914
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">78,853
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">123,152
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">43,812
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">62,411
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fixed
                Charges:</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                Expense</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25,155</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">106,612
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">91,174
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">47,320
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,103
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,297
                </font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
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            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">110
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="27%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Estimated
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            <td width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1,777</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2,052</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,585
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,621
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">351
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">417
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">450
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="27%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                Fixed Charges</font></div>
            </td>
            <td width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">34,775</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">27,213</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">115,307
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">94,795
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">47,671
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,520
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,747
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="27%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ratio
                of earnings to fixed charges</font></div>
            </td>
            <td width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.8</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;
                </font></div>
            </td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;
                </font></div>
            </td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.6</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.0</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.2</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="3%">
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                charges exceeded earnings by $19.3 million for the first quarter
                of
                2006.</font></div>
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                  charges exceeded earnings by $44.4 million in
                  2006.</font></div>
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            </td>
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            <td align="left" valign="top" width="69%"><font size="2">Fixed charges
              exceeded
              earnings by $15.9 million in 2005.</font></td>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>v077571_ex23-1.htm
<TEXT>
<html>
  <head>
    <title>
      Unassociated Document
</title><!-- Licensed to: vf-->
<!-- Document Created using EDGARizer HTML 3.0.4.0 -->
<!-- Copyright 2006 EDGARfilings, Ltd., an IEC company.-->
<!-- All rights reserved EDGARfilings.com -->
</head>
  <body bgcolor="#ffffff">
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit
      23.1</strong></font></div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CONSENT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        have
        issued our reports dated March 2, 2007, accompanying the consolidated financial
        statements and management's assessment of the effectiveness of internal control
        over financial reporting included in the Annual Report of American Real Estate
        Partners, L.P. on Form 10-K for the year ended December 31, 2006 which are
        incorporated by reference in this Registration Statement and Prospectus.
        We
        hereby consent to the incorporation by reference of said reports in this
        Registration Statement and Prospectus, and to the use of our name as it appears
        under the caption &#8220;Experts.&#8221; Our audit report on the consolidated financial
        statements expressed an unqualified opinion and contains an explanatory
        paragraph relating to the change in accounting for the Partnership's investment
        in ImClone Systems Incorporated and Subsidiary from an available for sale
        security to the equity method.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/
              Grant Thornton
              LLP</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="40%">
            </td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td align="left" width="40%">
            </td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td align="left" width="40%">
            </td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%">&#160;</td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="40%">&#160;</td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font size="2">New York, New York<br>June 15, 2007
</font></td>
            <td width="5%">&#160;</td>
            <td width="5%">&#160;</td>
            <td width="40%">&#160;</td>
          </tr>

      </table><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
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      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
  </body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>4
<FILENAME>v077571_ex23-2.htm
<TEXT>
<html>
  <head>
    <title>
      Unassociated Document
</title><!-- Licensed to: vf-->
<!-- Document Created using EDGARizer HTML 3.0.4.0 -->
<!-- Copyright 2006 EDGARfilings, Ltd., an IEC company.-->
<!-- All rights reserved EDGARfilings.com -->
</head>
  <body bgcolor="#ffffff">
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit
      23.2</strong></font></div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CONSENT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
            have
            issued our report dated March 2, 2007, accompanying the consolidated
            financial
            statements of American Real Estate Holdings Limited Partnership&#160;as of
            December 31, 2006, which is included in this Registration Statement and
            Prospectus. We consent to the use of the aforementioned report in the
            Registration Statement and Prospectus, and to the use of our name as
            it appears
            under the caption &#8220;Experts.&#8221; <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
            audit
            report on the consolidated financial statements expressed an unqualified
            opinion
            and contains an explanatory paragraph relating to the change in accounting
            for
            the Partnership&#8217;s investment in ImClone Systems Incorporated and Subsidiary from
            an available for sale security to the equity
            method.</font></font></div><br></div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">GRANT
              THORNTON&#160;LLP</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td align="left" width="40%">
            </td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td align="left" width="40%">
            </td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%">&#160;</td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="40%">&#160;</td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font size="2">New York, New York<br>June 15,
              2007</font>&#160;</td>
            <td width="5%">&#160;</td>
            <td width="5%">&#160;</td>
            <td width="40%">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
  </body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.3
<SEQUENCE>5
<FILENAME>v077571_ex23-3.htm
<TEXT>
<html>
  <head>
    <title>
</title>
</head>
  <body bgcolor="#ffffff">
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit
      23.3</strong></font></div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CONSENT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          issued our report dated June 15, 2007, accompanying the balance sheet of
          American Property Investors, Inc. as of December 31, 2006, which is included
          in
          this Registration Statement and Prospectus. We consent to the use of the
          aforementioned report in the Registration Statement and Prospectus, and
          to the
          use of our name as it appears under the caption <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#8220;</font>Experts.<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#8221;</font></font></div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/
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            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
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          <tr valign="top" bgcolor="#ffffff">
            <td align="left" width="40%">
            </td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td align="left" width="40%">
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          <tr valign="top" bgcolor="#ffffff">
            <td width="40%">&#160;</td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="40%">&#160;</td>
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              2007</font>&#160;</td>
            <td width="5%">&#160;</td>
            <td width="5%">&#160;</td>
            <td width="40%">&#160;</td>
          </tr>

      </table>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
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      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
  </body>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.4
<SEQUENCE>6
<FILENAME>v077571_ex23-4.htm
<TEXT>
<html>
  <head>
    <title>
   </title>
</head>
  <body bgcolor="#ffffff">
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit
      23.4</strong></font></div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>CONSENT&#160;OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><br></font>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        consent to the use of our report dated March 1, 2007, with respect to the
        consolidated balance sheets of ImClone Systems Incorporated and subsidiary
        as of
        December 31, 2006 and 2005, and the related consolidated statements of
        operations, stockholders&#8217; equity (deficit) and comprehensive income, for the
        years then ended, included in this registration statement and incorporated
        herein by reference and to the reference to our firm under the heading &#8220;Experts&#8221;
in the prospectus. Our report on the consolidated financial statements refers
        to
        the Company&#8217;s adoption of the provisions of Statement of Financial Accounting
        Standards No. 123R, &#8220;Share-Based Payment.&#8221;</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
              KPMG LLP</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="40%">
            </td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%">&#160;</td>
            <td width="5%">&#160;</td>
            <td width="5%">&#160;</td>
            <td width="40%">&#160;</td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%">&#160;</td>
            <td width="5%">&#160;</td>
            <td width="5%">&#160;</td>
            <td width="40%">&#160;</td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td align="left" width="40%"><font size="2">Princeton, New Jersey<br>June 15,
              2007</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" width="40%">
            </td>
          </tr>

      </table><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
  </body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.5
<SEQUENCE>7
<FILENAME>v077571_ex23-5.htm
<TEXT>
<html>
  <head>
    <title>
     </title>
</head>
  <body bgcolor="#ffffff">
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit
        23.5</strong></font></div>
    </div>
    <div>&#160;</div>
    <div><br>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>CONSENT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><br></font>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        consent to the use of our report dated March 1, 2007, with respect to the
        consolidated balance sheets of ImClone Systems Incorporated and subsidiary
        as of
        December 31, 2006 and 2005, and the related consolidated statements of
        operations, stockholders&#8217; equity (deficit) and comprehensive income and cash
        flows for each of the years in the three year period ended December 31, 2006,
        incorporated herein by reference
        and
        to the reference to our firm under the heading &#8220;Experts&#8221; in the prospectus. Our
        report on the consolidated financial statements refers to the Company&#8217;s adoption
        of the provisions of Statement of Financial Accounting Standards No. 123R,
        &#8220;Share-Based Payment.&#8221; </font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font size="2">/s/ KPMG LLP</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="40%">
            </td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td align="left" width="40%">
            </td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td align="left" width="40%">
            </td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%">&#160;</td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            <td width="40%">&#160;</td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td width="40%"><font size="2">Princeton, New Jersey<br>June 15,
              2007</font>&#160;</td>
            <td width="5%">&#160;</td>
            <td width="5%">&#160;</td>
            <td width="40%">&#160;</td>
          </tr>

      </table><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
  </body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.6
<SEQUENCE>8
<FILENAME>v077571_ex23-6.htm
<TEXT>
<html>
  <head>
    <title>
    </title>
</head>
  <body bgcolor="#ffffff">
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit
      23.6</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CONSENT&#160;OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.5pt" align="justify">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
            consent to the use of our report dated March 11, 2005, with respect to
            the
            consolidated statements of operations, changes in shareholders&#8217; equity, and cash
            flows for the year ended December 31, 2004 for GB Holdings, Inc. and
            subsidiaries, included herein and incorporated herein by reference and
            to the
            reference to our firm under the heading &#8220;Experts&#8221; in the Registration Statement.
            Our report dated March 11, 2005 contains an explanatory paragraph that
            states
            that GB Holdings Inc. has suffered recurring net losses, has a net working
            capital deficiency and has significant debt obligations which are due
            within one
            year that raise substantial doubt about its ability to continue as a
            going
            concern. The consolidated financial statements do not include any adjustments
            that might result from the outcome of that uncertainty.</font></div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
          <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

              <tr valign="top" bgcolor="#ffffff">
                <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td width="40%"><font size="2">/s/&#160;KPMG LLP</font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="40%">
                </td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td align="left" width="40%">
                </td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" width="40%">
                </td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td width="40%">&#160;</td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="40%">&#160;</td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td width="40%"><font size="2">Short Hills, New Jersey<br>June 15,
                  2007</font>&#160;</td>
                <td width="5%">&#160;</td>
                <td width="5%">&#160;</td>
                <td width="40%">&#160;</td>
              </tr>

          </table><br></div>
      </div>
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    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
  </body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.7
<SEQUENCE>9
<FILENAME>v077571_ex23-7.htm
<TEXT>
<html>
  <head>
    <title>
</title>
</head>
  <body bgcolor="#ffffff">
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit
      23.7</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CONSENT&#160;OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0.5pt" align="justify">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><br></font>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
              consent to the reference to our firm under the caption &#8220;Experts&#8221; and to the use
              of our report dated February 20, 2007, with respect to the consolidated
              financial statements and schedule of Lear Corporation included in the
              Registration Statement (Form S-4) and related Prospectus of American
              Real Estate
              Partners, L.P. for the registration of $500,000,000 of its 7 1/8 %
              Senior Notes
              Due 2013.</font></div>
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                <td width="40%"><font size="2">/s/&#160;Ernst &amp; Young LLP</font></td>
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                <td width="40%"><font size="2">Detroit, Michigan<br>June 18,
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