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<SEC-DOCUMENT>0000006207-06-000015.txt : 20060727
<SEC-HEADER>0000006207-06-000015.hdr.sgml : 20060727
<ACCEPTANCE-DATETIME>20060727164144
ACCESSION NUMBER:		0000006207-06-000015
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20060430
FILED AS OF DATE:		20060727
DATE AS OF CHANGE:		20060727

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMREP CORP
		CENTRAL INDEX KEY:			0000006207
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-BUSINESS SERVICES, NEC [7389]
		IRS NUMBER:				590936128
		STATE OF INCORPORATION:			OK
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-04702
		FILM NUMBER:		06984935

	BUSINESS ADDRESS:	
		STREET 1:		641 LEXINGTON AVENUE
		STREET 2:		6TH FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022
		BUSINESS PHONE:		2127054700

	MAIL ADDRESS:	
		STREET 1:		641 LEXINGTON AVE
		STREET 2:		6TH FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10022

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICAN REALTY & PETROLEUM CORP
		DATE OF NAME CHANGE:	19671019
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>axr10k06.txt
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                              --------------------

                                    FORM 10-K
                 ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)


[ x ] Annual  Report  pursuant  to  Section  13 or  15(d)  of the  Securities
      Exchange Act of 1934 For the fiscal year ended April 30, 2006
                                       OR
[   ] Transition  Report  pursuant  to Section  13 or 15(d) of the  Securities
      Exchange Act of 1934 For the transition period from          to
                                                          --------    --------

                          Commission File Number 1-4702
                                                 ------

                                AMREP CORPORATION
                                -----------------
             (Exact name of registrant as specified in its Charter)

         Oklahoma                                             59-0936128
         --------                                             ----------
 (State or other jurisdiction of                          (IRS Employer
  incorporation or organization)                          Identification No.)

 212 Carnegie Center, Suite 302
      Princeton, New Jersey                                     08540
      ---------------------                                     -----
Address of principal executive offices)                       (Zip Code)

       Registrant's telephone number, including area code: (609) 716-8200
                                                           --------------

           Securities registered pursuant to Section 12(b) of the Act:

      Title of Each Class             Name of Each Exchange on Which Registered
      -------------------            -------------------------------------------
  Common Stock $.10 par value                   New York Stock Exchange

        Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant is a well-known  seasoned  issuer,
as defined in Rule 405 of the Securities Act.
                           Yes         No   X
                               -----      -----

Indicate  by  check  mark if the  Registrant  is not  required  to file  reports
pursuant  to Section  13 or 15(d) of the  Securities  Exchange  Act of 1934 (the
"Act").
                           Yes         No   X
                               -----      -----

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Act during the preceding 12 months (or
for such shorter  period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
                           Yes   X     No
                               -----      -----

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ X ]

Indicate by check mark whether the Registrant is a large  accelerated  filer, an
accelerated  filer or a  non-accelerated  filer.  See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Act.
  Large accelerated filer     Accelerated filer     Non-accelerated filer  X
                          ---                   ---                       ---

Indicate by check mark whether the  Registrant is a shell company (as defined in
Rule 12b-2 of the Act).
                           Yes         No   X
                               -----      -----
<PAGE>


As of October 31, 2005, which was the last business day of the Registrant's most
recently  completed  second fiscal  quarter,  the aggregate  market value of the
Common Stock held by  non-affiliates  of the  Registrant was  $44,854,869.  Such
aggregate  market  value was  computed by reference to the closing sale price of
the  Registrant's  Common Stock as quoted on the New York Stock Exchange on such
date. For purposes of making this  calculation  only, the Registrant has defined
affiliates as including all directors and executive officers and certain persons
related to them.  In making such  calculation,  the  Registrant  is not making a
determination of the affiliate or non-affiliate  status of any holders of shares
of Common Stock.

As of July 27, 2006,  there were  6,645,112  shares of the  Registrant's  Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

As  stated  in Part III of this  annual  report on Form  10-K,  portions  of the
Registrant's  definitive  proxy  statement to be filed within 120 days after the
end of the  fiscal  year  covered  by  this  annual  report  on  Form  10-K  are
incorporated herein by reference.











































                                       2
<PAGE>

                                     PART I
                                     ------

Item 1.          Business
- -------          --------

                                     GENERAL

The Company*,  through its subsidiaries,  is primarily engaged in three business
segments:  the Real Estate  business  operated by AMREP  Southwest  Inc. and its
subsidiaries (collectively, "AMREP Southwest"), and the Fulfillment Services and
Newsstand  Distribution  Services  businesses  operated by Kable Media Services,
Inc. and its  subsidiaries  (collectively,  "Kable").  Data concerning  industry
segments  is set  forth in note 17 of the  notes to the  consolidated  financial
statements. The Company's foreign sales and activities are not significant.

                             REAL ESTATE OPERATIONS

The Company  conducts its Real Estate  business  through AMREP  Southwest,  with
these activities  occurring  primarily in Rio Rancho,  New Mexico. As of July 1,
2006, the Real Estate business employed  approximately 15 persons,  none of whom
were represented by labor unions. The Company considers its relations with these
employees to be good.

Land Development Properties - Rio Rancho

Rio Rancho  (including the City) consists of 91,049 contiguous acres in Sandoval
County, New Mexico, near Albuquerque,  of which approximately  73,600 acres have
been platted into  approximately  113,800 homesite and commercial  lots,  16,400
acres  are  dedicated  to  community  facilities,  roads  and  drainage  and the
remainder is unplatted  land. At April 30, 2006,  approximately  88,200 of these
lots had been sold. The Company currently owns approximately 18,500 acres in Rio
Rancho,  of which  approximately  4,900 acres are in contiguous blocks which are
being developed or are suitable for development  and  approximately  2,000 acres
are in  areas  with a high  concentration  of  ownership  suitable  for  special
assessment  districts  or city  redevelopment  areas  which may allow for future
development under the auspices of local government.  The balance is in scattered
lots which may require the purchase of a sufficient  number of adjoining lots to
create tracts suitable for  development or which may be sold  individually or in
small groups.

Development  activities  conducted  or  arranged  by  the  Company  include  the
obtaining of necessary governmental approvals ("entitlements"),  installation of
utilities and necessary storm drains, and building or improving of roads. At Rio
Rancho, the Company is developing both residential lots and sites for commercial
and industrial use as the demand warrants, and also is securing entitlements for
large development  tracts for sale to homebuilders.  The engineering work at Rio
Rancho is performed by both Company employees and outside firms, but development
work is  performed  by outside  contractors.  Land at Rio Rancho is  marketed by
Company personnel,  both directly and through brokers. The Company competes with
other  owners  of land in the  Albuquerque  area who  offer  for sale  developed
residential lots and sites for commercial and industrial use.

Today,  Rio Rancho is the third  largest  city in New Mexico  with a  population
approaching  70,000.  The commercial areas in Rio Rancho presently  include more
than 500 businesses and  professional  offices,  as well as 17 shopping  centers
with approximately 1.7 million square feet of retail and office space, including
a 55,000 square foot office building and a 29,000 square foot commercial  rental
property which are owned by the Company. The industrial areas have approximately
85  buildings  with   approximately   4.5  million  square  feet,   including  a
manufacturing facility containing approximately 3.1 million square feet which is
owned and occupied by Intel Corporation, Rio Rancho's largest employer.

Since early 1977, no individual  lots without homes at Rio Rancho have been sold
by the Company to  consumers.  A  substantial  number of lots without homes were
sold prior to 1977, and most of these are in areas where  utilities have not yet
been installed.  However,  under certain of the contracts  pursuant to which the
lots were sold, if utilities  have not reached a lot when the purchaser is ready
to build a home, the


- --------------------
*As used herein,  "Company" includes the Registrant and its subsidiaries  unless
the context requires or indicates otherwise.

                                       3
<PAGE>

Company  is  obligated  to  exchange  a lot in an area then  serviced  by water,
telephone and electric  utilities for the lot of the purchaser,  without cost to
the purchaser.  The Company has not incurred  significant  costs related to such
exchanges.

Other Real Estate Properties

The Company has various  investment  properties,  principally  consisting of the
55,000  square foot  office  building it owns in Rio Rancho in which it occupies
approximately 5,400 square feet and leases the remainder,  and the 29,000 square
foot  commercial  rental  property it owns in Rio Rancho that is presently being
offered for lease. The Company may develop additional  investment  properties in
the future.

The  Company  also  owns  two  tracts  of land in  Colorado,  consisting  of one
residential  property of approximately  160 acres planned for  approximately 350
homes  which is being  offered  for sale  subject  to  obtaining  all  necessary
entitlements,  and one property of  approximately  10 acres zoned for commercial
use,  which is also being  offered  for sale but which may be  developed  by the
Company.

       FULFILLMENT SERVICES AND NEWSSTAND DISTRIBUTION SERVICES OPERATIONS

Through Kable,  the Company (i) performs  subscription  fulfillment  and related
services for publishers  and other  customers and (ii)  distributes  periodicals
nationally and in Canada and, to a small degree, in other foreign countries.  As
of  July  1,  2006,  Kable  employed   approximately   1,280  persons,  of  whom
approximately  1,130 were  involved  in its  fulfillment  activities  and 150 in
distribution  activities,  none of whom were  represented  by labor unions.  The
Company considers its relations with these employees to be good.

Fulfillment Services

Kable's  Fulfillment  Services  business  performs a number of  fulfillment  and
fulfillment-related  activities,  principally magazine subscription  fulfillment
services, lettershop and graphic arts services, customer telephone support, list
services and product fulfillment  services,  and it accounted for 85% of Kable's
revenues in fiscal 2006.

In the magazine subscription fulfillment service operation,  Kable processes new
orders,  receives  and  accounts  for  payments,  prepares  and  sends  to  each
publisher's  printer  labels or tapes  containing  the names  and  addresses  of
subscribers for mailing each issue,  handles subscriber  telephone inquiries and
correspondence,  prepares  renewal  and  statement  notifications  for  mailing,
maintains  subscriber lists and data bases,  generates marketing and statistical
reports,  processes internet orders and prints forms and promotional  materials.
Kable performs all of these services for many clients,  but some clients utilize
only certain of them.  Although by far the largest number of magazine titles for
which Kable performs fulfillment services are consumer publications,  Kable also
performs  services  for a number of trade  (business)  publications,  membership
organizations  and government  agencies which utilize the broad  capabilities of
Kable's extensive data base system.

Kable's lettershop and graphic arts departments  prepare and mail statements and
renewal forms for its  publisher  clients to use in their  subscriber  mailings.
List services  clients are also primarily  publishers  for whom Kable  maintains
client customer lists, selects names for clients who rent their lists to others,
merges  rented  lists  with a client's  list to  eliminate  duplication  for the
client's promotional mailings, and sorts and sequences mailing labels to provide
optimum postal discounts for clients.  Product fulfillment services are provided
for Kable's  publisher  clients and other direct  marketers.  In this  activity,
Kable receives, warehouses, processes and ships merchandise.

The Company  believes that Kable is the second largest  provider of subscription
fulfillment  services to magazine  publishers in the United  States,  performing
fulfillment  services  for  approximately  725  different  magazine  titles  for
approximately  250 clients and maintaining  almost 41 million active  subscriber
names  for  its  client   publishers.   In  a  typical  month,   Kable  produces
approximately  50 million  mailing  labels for its  client  publishers  and also
processes over 15 million pieces of outgoing mail for its clients.

There are a number of companies that perform fulfillment services for publishers
and with which Kable  competes,  including  one which is much larger than Kable.

                                       4
<PAGE>

Since  publishers  often  utilize  only  a  single  fulfillment  company  for  a
particular  publication,  there is  intense  competition  to obtain  fulfillment
contracts  with  publishers.  Competition  for  non-publisher  clients  is  also
intense.  Kable  has a  staff  whose  primary  task  is to  solicit  fulfillment
business.

Newsstand Distribution Services

In its Newsstand  Distribution  Services operation,  Kable distributes magazines
for over 250 publishers.  Among the titles are many special interest  magazines,
including automotive,  puzzle, men's sophisticates,  comics, romance and sports.
Kable generally  purchases the publications from its publisher clients and sells
them to independent  wholesalers.  The wholesalers in turn sell the publications
to retail  outlets.  All parties  generally  have full return  rights for unsold
copies. In a typical month during fiscal 2006, Kable  distributed  approximately
25  million  copies  of  various  titles  through  a  distribution   network  of
approximately 100 independent  wholesalers.  The newsstand distribution business
accounted for 15% of Kable's revenues in fiscal 2006.

While Kable does not handle all publications of all of its publisher clients, it
usually is the exclusive distributor for the publications it distributes.  Kable
has a distribution  sales and marketing  force that works with  wholesalers  and
retailers  to  promote  product  sales and assist in  determining  the number of
copies of product to be delivered to each  retailer.  Kable  generally  does not
physically  handle  any  product.  It  determines,   in  consultation  with  the
wholesalers  and  publishers,   the  number  of  copies  of  each  issue  to  be
distributed,  and generates and delivers to each  publisher's  printer  shipping
instructions  with the addresses of the  wholesalers and the number of copies of
product to be shipped to each. All magazines have an "off-sale"  date (generally
the on-sale date of the next issue)  following which the retailers return unsold
copies to the  wholesalers,  who  destroy  them after  accounting  for  returned
merchandise in a manner satisfactory to Kable.

Kable generally  makes  substantial  cash advances to publishers  against future
sales,  which publishers may use to help pay for printing,  paper and production
costs  prior  to the  product  going  on  sale.  Kable  is  usually  not paid by
wholesalers  for product until some time after the product has gone on sale, and
is therefore  exposed to potential credit risks with both the publishers and the
wholesalers. Its ability to limit its credit risk and make a profit is dependent
in part on its skill in estimating the number of copies of an issue which should
be printed  and  distributed  and on  limiting  its  advances  to the  publisher
accordingly.

Kable competes primarily with three other national distributors, all of whom are
substantially larger than Kable. Each of these larger competitors is owned by or
affiliated  with  a  magazine  publishing  company.  Such  companies  publish  a
substantial  portion of all magazines  published in the United  States,  and the
competition  for  the  distribution  rights  to the  remaining  publications  is
intense. In addition,  there has been a major consolidation and reduction in the
number of wholesalers to whom Kable  distributes  magazines arising from changes
within the magazine distribution industry in recent years. As a result, three of
these  wholesalers  accounted  for  approximately  57% of the fiscal  2006 gross
billings of the Newsstand Distribution Services operations and approximately 47%
of Kable's consolidated accounts receivable at April 30, 2006.

Item 1A.          Risk Factors
- --------          ------------

The risks  described  below are among those that could  materially and adversely
affect the Company's  business,  financial  condition or results of  operations.
These risks could cause  actual  results to differ  materially  from  historical
experience and from results predicted by any forward-looking  statements related
to  conditions  or events that may occur in the future.  These risks are not the
only risks the Company  faces,  and other risks  include  factors not  presently
known as well as those that are currently considered to be less significant.

Real Estate Operations
- ----------------------

The Company's Real Estate  business is highly  concentrated  in one market,  and
current  results and future  growth may be limited if the economy  contracts  in
this market.  Substantially  all of the Company's real estate assets are located
in Rio Rancho,  New Mexico.  As a result of this geographic  concentration,  the
Company could be affected by changes in economic  conditions in this region from
time to time,  including  economic  contraction due to, among other things,  the

                                       5
<PAGE>

failure of key industries and employers.  The Company's results of operations or
future  growth  may be  adversely  impacted  if the demand  for  residential  or
commercial  real estate  declines  in Rio Rancho as a result of such  changes in
economic conditions.

The Company  owns a depleting  asset,  and  long-term  growth in the Real Estate
business will require the acquisition of additional  inventory or expansion into
new markets. Substantially all of the Company's real estate revenues are derived
from sales of its core  inventory in Rio Rancho,  New Mexico.  This property was
acquired  more than 40 years ago,  and as of April 30, 2006,  the Company  still
owned approximately 18,500 acres from this original purchase.  From time to time
during the Company's history, it has operated in other markets and it still owns
some land in Colorado,  but currently its operations  are conducted  entirely in
Rio Rancho. The continuity and future growth of the Company will require that it
acquire new  properties  in Rio Rancho or expand to other  markets to provide it
with sufficient assets in order to maintain its current level of operations. The
success of any such acquisitions may depend on the Company's ability to identify
and fairly value appropriate  assets for acquisition and to successfully  manage
and integrate such assets and personnel acquired in these  transactions.  If the
Company does not acquire new real estate assets,  it will  eventually  liquidate
its existing holdings and be out of the real estate business.

The Company is subject to substantial  legal,  regulatory and other requirements
regarding  the  development  of land,  which can cause  delays in land sales and
increase costs.  Development activities performed in connection with real estate
sales (including  obtaining necessary  governmental  approvals,  access to water
supplies,  installation of utilities and necessary storm drains, and building or
improving  roads) are regulated by numerous local,  state and federal  statutes,
ordinances,  rules and regulations,  including those concerning zoning, resource
protection and other  environmental  impacts.  These  regulations  often provide
broad  discretion to  governmental  authorities  that regulate these matters and
from whom the Company must obtain approvals.  The approval process can result in
delays and  increases  in cost to the Company as well as its primary  customers,
commercial and residential builders. Government regulations and legal challenges
may delay the start of planned  communities,  increase the Company's expenses or
limit its customers'  development  activities.  Various local, state and federal
statutes, ordinances, rules and regulations concerning access to water supplies,
zoning, construction, sales and similar matters also apply to the industry. This
governmental regulation affects the Company's land sales activities and at times
may limit the  Company's  ability to develop or sell land.  Delays and increased
expenses may also be  experienced  as a result of legal  challenges  to proposed
communities, whether brought by governmental authorities or private parties.

Increases in taxes or  governmental  fees would  increase the  Company's  costs.
Also,  adverse  changes in tax laws could  reduce  customer  demand for land for
commercial and residential development. Increases in real estate taxes and other
local  governmental  fees,  such as fees imposed on  developers to fund schools,
open space and road  improvements or to provide low and moderate income housing,
would  increase the Company's  costs and have an adverse effect on the Company's
operations.  In  addition,  increases  in local real estate  taxes or changes in
income tax laws that would  reduce or eliminate  tax  deductions  or  incentives
could  adversely  affect  homebuilders'  potential  customer  demand  and  could
adversely affect future sales.

Changing  market  conditions may adversely  affect  companies in the real estate
industry who rely upon adequate  credit in order to finance  their  purchases of
land from the Company. Residential and commercial developers to whom the Company
sells land  frequently  rely upon third party  financing  to provide the capital
necessary for their acquisition of land.  Changes in economic and other external
market  conditions may result in their inability to obtain  suitable  financing,
which could adversely impact the Company's  ability to sell land, or necessitate
it to sell land at lower prices,  thus reducing the margins that the Company has
historically achieved.

Adverse changes in general economic,  real estate  development or other business
conditions  could  adversely  affect the  Company's  business and its  financial
results.  A significant  percentage of the  Company's  real estate  revenues are
derived  from  customers  in the  residential  homebuilding  business,  which is
sensitive to changes in economic conditions and other factors, such as the level
of employment,  consumer confidence,  consumer income,  availability of mortgage
financing and interest rate levels.  Adverse changes in any of these conditions,
in  particular  in the Rio  Rancho  market  where the  Company  operates,  could
decrease  demand and  therefore  affect the pricing of land sold to  developers,
resulting in a decrease in the Company's revenues and earnings.

                                       6
<PAGE>

Real Estate is a cyclical industry.  During periods of economic  expansion,  the
Real Estate business  generally  benefits from the demand for developable  land.
During  periods of  economic  contraction,  the Company is  generally  adversely
affected by declining  demand for land.  Also, there can be no assurance that an
increase in demand or an economic  expansion will be sustained in the Rio Rancho
market, where the Company's core real estate business is based and operates.

The Real Estate business is dependent on subcontractors. The development of land
on a  timely  basis is  critical  to the  Company's  ability  to close  sales of
property in accordance with its  contractual  obligations.  The  availability of
subcontractors  in the Rio Rancho  market can be affected  by  numerous  factors
beyond  the  Company's   control,   including  the  general   demand  for  these
subcontractors  by other sellers of land.  While  alternate  suppliers exist for
many of the services required by the Company, there can be no assurance that the
Company will not experience  delays or be forced to seek alternative  suppliers,
which may  increase  costs or  adversely  affect  its  ability to sell land on a
timely basis.

Media Service Operations
- ------------------------

The  Company  participates  in highly  competitive  industries  and  competitive
pressures  may result in a  decrease  in its  revenues  and  profitability.  The
Fulfillment and Newsstand  Distribution  Services  businesses  compete in highly
competitive  markets,  and some  competitors  have financial  resources that are
substantially  greater than those of the Company.  Over the past several  years,
the  Company has  experienced  significant  price  competition  in its  markets.
Competitive  pressures  could cause the Company's  Media Services  businesses to
lose market  share or result in  significant  price  erosion  that would have an
adverse effect on their results of operations.

The  introduction and increased  popularity of alternative  technologies for the
distribution  of news,  entertainment  and other  information  and the resulting
shift in consumer habits and advertising  expenditures from print to other media
could  adversely  affect the Newsstand  Distribution  and  Fulfillment  Services
businesses.  Revenues in the Media Services  business  segments are  principally
derived from  services  performed  for  publishers.  The  distribution  of news,
entertainment  and other  information  via the Internet has become  increasingly
popular over the past several years, and viewing news,  entertainment  and other
content  on a  personal  computer,  cellular  phone or other  device  has become
increasingly  popular as well.  Accordingly,  the resulting shift of advertising
dollars  from  traditional  print to online  media  could  adversely  affect the
publishing  industry and,  ultimately,  have a "trickle down" negative impact on
the Company's Newsstand  Distribution and Fulfillment Services businesses due to
a shift in  consumer  demand  away  from the  print  media  and  toward  digital
downloading and other delivery methods.

Media  operations could face increased costs and business  disruption  resulting
from  instability in the newsstand  distribution  channel.  The Company  extends
credit to various companies that may be affected by changes in economic or other
external  conditions.  Financial  instruments  that may potentially  subject the
Company  to a  significant  concentration  of risk  primarily  consist  of trade
accounts receivable from wholesalers in the magazine distribution  industry. Due
to industry  consolidation,  four wholesalers represent approximately 80% of the
wholesale  magazine  distribution  business.  There is a possibility  of further
consolidation  among these wholesalers,  and the insolvency of any of them could
have a material, adverse impact on the Company's financial condition and results
of operations.  Should there be a disruption in the wholesale channel,  it could
impede the ability to distribute magazines to the retail marketplace.

The Company's operating results depend in part on continued successful research,
development  and  marketing  of new or  improved  services  and data  processing
capabilities.  There  can  be  no  assurance  that  the  Company  will  continue
successfully  to introduce new services and data  processing  capabilities  on a
timely  and  cost-effective  basis.  The  success of new and  improved  services
depends on their initial and continued  acceptance by the various publishers and
customers  with whom the Company  conducts its business.  The Company's  several
revenue  streams are  affected by varying  degrees of  technological  change and
shifts in  customer  demand,  which may  result in the  transition  of  services
provided  and an  increased  importance  of being  "first  to  market"  with new
services and information processing  innovations.  Difficulties or delays in the
development,  production or marketing of new services and information processing
capabilities  may be experienced,  and this may negatively  impact the Company's
operating  results  and  prevent  it from  realizing  the  return on  investment
required to bring new services and information processing capabilities to market
on a timely and cost effective basis.

                                       7
<PAGE>

The Company  operates in highly  competitive  markets  that are subject to rapid
change,  and the Company must continue to invest in developing  technologies and
adapt  various  systems in order to remain  competitive.  There are  substantial
uncertainties  associated with the Company's efforts to develop new technologies
and services for the media fulfillment and distribution  markets it serves.  The
Company makes significant investments in new information processing technologies
and  services  that  may not be  profitable  and  even if they  are  profitable,
operating  margins  for new  technologies  and  services  may be lower  than the
margins that the Company has experienced historically.

The Company's  operations  could be disrupted if its  information  systems fail,
causing increased  expenses and loss of sales. The Company's business depends on
the efficient  and  uninterrupted  operation of its computer and  communications
capabilities,  including the  maintenance of customer data bases for billing and
label processing,  as well as its magazine distribution order regulation system.
If a key system were to fail or experience unscheduled down-time for any reason,
even if only for a short period, the Company's  operations and financial results
could  be  adversely  affected.  The  Company's  systems  could  be  damaged  or
interrupted by fire, flood, power loss, telecommunications failure, break-ins or
similar events.  The Company has a formal disaster  recovery plan in place,  but
this  plan  may  not be  entirely  successful  in  preventing  delays  or  other
complications  that could arise from  information  systems failure and, if it is
not successful, the Company's business interruption insurance may not adequately
compensate it for losses that may occur.

Virtually all of the Company's revenues in the Newsstand  Distribution  Services
business are derived from sales made on a fully  returnable  basis, and an error
in estimating  expected  returns could cause a misstatement  of revenues for the
period  affected.  As  is  customary  in  the  magazine  distribution  industry,
virtually  all of the Company's  revenues in this  business  segment are derived
from sales made on a fully  returnable  basis.  During the year ended  April 30,
2006,  approximately 75% of the magazines  initially  distributed by the Company
were  ultimately  returned  for  credit by  customers.  The  Company  recognizes
revenues  from the  distribution  of  magazines  at the time of  delivery to the
wholesalers,  less a reserve for  estimated  returns that is based on historical
experience and most recent sales data on an issue-by-issue  basis.  Although the
Company has the  contractual  right to return  these  magazines  for  offsetting
credits from the publishers  from whom the magazines are purchased,  an error in
estimating  the  percentage of returns at the end of an accounting  period would
have the effect of understating  or overstating  revenues in the period affected
as well as in the subsequent periods when the correct information became known.

The Company  depends on the Internet to deliver some of its services,  which may
expose the Company to increased  risks.  Many of the  Company's  operations  and
services,  including order taking on behalf of customers and communications with
customers and suppliers, involve use of the Internet, and the Company's business
is subject to any factors that adversely  affect Internet  usage,  including the
reliability  of  Internet  service  providers,  which,  from time to time,  have
operational  problems and experience service outages.  Additionally,  one of the
requirements   of  the  continued   growth  over  the  Internet  is  the  secure
transmission  of  confidential  information  over  public  networks.  Failure to
prevent security breaches of the Company's networks or those of its customers or
well-publicized  security  breaches  affecting  the  Internet  in general  could
significantly harm growth and revenues.

Other Entity-Wide Risk Factors
- ------------------------------

The Company  requires access to credit  facilities,  and either the inability to
obtain adequate  financing or increases in interest rates could adversely affect
its results of  operations.  The Company's  operations  depend on its ability to
obtain  financing for  development of land inventory in the Real Estate business
and for  working  capital  and  capital  expenditure  requirements  in the Media
Services business. If the Company is not able to obtain suitable financing,  its
costs could  increase and its revenues could  decrease,  or the Company could be
precluded from continuing its operations at current levels.

Increases in interest  rates can make it more  difficult and expensive to obtain
the funds needed to operate the Company's  businesses.  The applicable  interest
rates on the revolving bank credit facilities that both the Real Estate business
and  Media  Service  business  have in  place  fluctuate  based  on  changes  in
short-term interest rates generally and on the amount of outstanding  borrowings
under those facilities. Increases in interest rates would increase the Company's
interest expense.

                                       8
<PAGE>

The  Company  may  engage in  acquisitions  and may  encounter  difficulties  in
integrating  these  businesses and,  therefore,  may not realize the anticipated
benefits of the  acquisitions.  From time to time,  the Company may seek to grow
through strategic  acquisitions  intended to complement or expand one or more of
its  businesses  or to enable it to enter a new  business.  The success of these
transactions  may  depend on its  ability to  integrate  systems  and  personnel
acquired  in these  transactions  without  substantial  costs,  delays  or other
operational or financial  problems.  The Company may encounter  difficulties  in
integrating  acquisitions  with its  operations or in separately  managing a new
business.  Furthermore,  the  Company  may not  realize  the degree or timing of
benefits that it anticipates when first entering into a transaction.  Any of the
foregoing  could  adversely  affect  the  Company's   business  and  results  of
operations.

The Company's  management and internal systems may not be adequate to handle its
potential  growth.  To manage  future  growth,  the  Company's  management  must
continue to improve  operational  and  financial  systems and to expand,  train,
retain and manage its employee  base. At the same time,  the Company will likely
be  required  to  manage an  increasing  number of  relationships  with  various
customers and other parties.  If the Company's systems,  procedures and controls
are  inadequate  to support its  operations,  expansion  could be halted and the
opportunity  to gain  significant  additional  market  share could be lost.  Any
inability to manage growth effectively may harm the Company's business.

If  the  Company's  accounting  controls  and  procedures  are  circumvented  or
otherwise  fail to  achieve  their  intended  purposes,  its  business  could be
seriously  harmed.  Although the Company  evaluates  its  internal  control over
financial reporting and disclosure controls and procedures as of the end of each
quarter,  it may not be able to prevent all  instances of  accounting  errors or
fraud in the future.  These control  systems remain subject to the risk of human
error and the risk that controls can be  circumvented  for wrongful  purposes by
individuals in management and non-management  positions.  The Company's business
could be seriously harmed by any material failure of these control systems.

The Company has a principal  shareholder whose interests may conflict with other
investors.  The Company's  principal  shareholder owns  approximately 55% of its
outstanding  capital stock.  As a result,  the principal  shareholder  exercises
significant influence over the Company's major decisions,  including through his
ability to nominate and elect the members of the Board of Directors.

The  Company's  common  stock price has been  volatile,  which  could  result in
substantial  losses for  stockholders.  The Company's  common stock is currently
traded on the New York Stock  Exchange.  The  closing  sale prices of its common
stock have  ranged  from a low of $21.58 per share to a high of $46.75 per share
for the 52-week period ending April 30, 2006. The trading price of the Company's
common stock can be affected by numerous factors, including, but not limited to,
announcements  of new  services,  additions  or  departures  of  key  personnel,
quarterly fluctuations in the Company's operating results,  changes in analysts'
estimates of financial  performance,  general  conditions  in the  industries in
which the Company  operates and in the financial  markets and a variety of other
risk factors, including the ones disclosed in this annual report on Form 10-K.

The  Company's  quarterly  operating  results can fluctuate  significantly.  The
Company  has   experienced,   and  may  continue  to   experience,   significant
fluctuations in its quarterly operating results,  which may adversely affect its
stock price.  Future quarterly  operating results may not align with past trends
as  a  result  of  numerous  factors,   including  many  that  result  from  the
unpredictability  of the  nature  and  timing of real  estate  land  sales,  the
variability in gross profit margins and competitive pressures.

Changes in tax laws or the  interpretation of tax laws may negatively affect the
Company's  business.  The Company  believes  that its  recorded tax balances are
adequate. However, it is not possible to predict the effects of possible changes
in tax laws or in their  interpretation  and whether such  changes  could have a
material negative effect on the Company's operating results.

The Company may be subject to costly  litigation  and  governmental  proceedings
that could  adversely  affect its results of operations.  From time to time, the
Company  may be subject  to  various  claims  and  lawsuits  by the  government,
competitors, customers or other parties arising in or out of the ordinary course
of business.  Such matters can be time-consuming,  divert management's attention
and resources, and cause the Company to incur significant expenses. Furthermore,
there can be no assurance that the results of any of these actions will not have
a material  adverse  effect on the Company's  future  operating  results or cash
flows.

                                       9
<PAGE>

Terrorist  attacks  and  threats  may  disrupt  the  Company's   operations  and
negatively impact its revenues,  costs and stock price. The terrorist attacks in
September 2001 in the U.S., the U.S. response to those attacks and the resulting
decline in consumer  confidence  had a  substantial  adverse  impact on the U.S.
economy. Any similar future events may disrupt the Company's operations or those
of its customers. In addition, these events have had and may continue to have an
adverse  impact on the U.S.  economy  in general  and  consumer  confidence  and
spending  in  particular,  which  could  harm the  Company's  revenues.  Any new
terrorist  events or threats could have a negative  impact in the U.S. and world
financial  markets,  which could reduce the price of the Company's  common stock
and  limit  the  capital  resources   available  to  it  and  the  homebuilders,
publishers,  customers and others with whom the Company conducts business.  This
could have a significant  impact on revenues,  costs and  operating  results and
might result in increased volatility in the market price of the Company's common
stock.

The  Company's  pension plan is  underfunded,  and may require  additional  cash
contributions.  The Company's pension plan is underfunded by approximately  $3.2
million  at  April  30,  2006.  A  key   assumption   underlying  the  actuarial
calculations upon which the Company's  accounting and reporting  obligations are
based is an assumed  investment rate of return of 8%; if the pension plan assets
do not  realize  this  expected  rate of  return  or if  other  assumptions  are
incorrect,  the Company could be required to make  substantial  contributions to
its pension plan until the plan is fully funded, which could limit the Company's
financial flexibility.

The Company is dependent on its key personnel. The Company is dependent upon the
continued  services of certain key officers and  employees,  and the loss of key
personnel  could have an adverse effect on the Company's  business.  The Company
does not maintain "key man" insurance for any of its officers, and its continued
success  depends on the  ability to attract  and retain a skilled  labor  force.
There can be no assurance  that the Company will be successful in attracting and
retaining the personnel  required  either to maintain its business or expand its
operations.

Item 1B.          Unresolved Staff Comments
- --------          -------------------------

Not applicable.

Item 2.           Properties
- -------           ----------

The Company's  executive offices are located in approximately  2,500 square feet
of leased  space in an office  building in  Princeton,  New Jersey.  Real Estate
operations  are based in  approximately  5,400  square  feet in a  Company-owned
55,000 square foot office building in Rio Rancho, New Mexico, with the remaining
space leased to commercial tenants. In addition, other real estate inventory and
investment  properties  are described in Item 1. Kable's  executive  offices are
based in New  York  City,  and  these  offices  together  with  the  production,
administration,  sales and other  facilities  for its  Fulfillment  Services and
Newsstand  Distribution  Services  businesses  are  located in twelve  owned and
leased facilities which, in the aggregate, comprise approximately 600,000 square
feet of space in Mt. Morris, Illinois,  Marion, Ohio, Louisville,  Colorado, New
York City and Cerritos,  California.  The Company  believes its  facilities  are
adequate for its current and anticipated requirements.

Item 3.           Legal Proceedings
- -------           -----------------

A. On May 3, 2000, a civil action was  commenced in the United  States  District
Court for the Southern District of New York entitled United Magazine Company, et
al. v. Murdoch Magazines  Distribution,  Inc., et al. The Complaint was filed by
five affiliated magazine wholesalers and a related service company (collectively
referred to as "Unimag") against Murdoch,  a national  distributor of magazines,
and Chas. Levy Circulating Co., a magazine wholesaler.  An Amended Complaint was
filed on August  31,  2000,  in which the  Company's  Kable News  Company,  Inc.
subsidiary  and three  other  national  distributors  were added as  defendants.
Motions by the defendants to dismiss the Amended  Complaint  were granted,  with
leave to the  plaintiffs  to replead  specified  claims.  In June 2001, a Second
Amended  Complaint was filed which  included two claims  against Kable News: (i)
violation of the Robinson-Patman  Act, which generally prohibits  discriminatory
pricing, and (ii) breach of fiduciary duty.

The defendants moved to dismiss the Second Amended  Complaint.  The Court denied
the motions  with respect to the  Robinson-Patman  Act claim but  dismissed  the

                                       10
<PAGE>

claim for breach of fiduciary duty. Kable News then answered the Robinson-Patman
Act claim, denying the material allegations and asserting  affirmative defenses.
Kable News also  asserted  counterclaims  to recover  certain  unpaid debts from
Unimag.

Pursuant to an order of a United States Magistrate Judge in October 2003, Unimag
presented  each of the  defendants  with an analysis of its damage claim against
such  defendant.  The damage claim against  Kable News amounts to  approximately
$15.2 million; any damages awarded would be trebled.

Pretrial discovery has been completed.  The action against Levy was settled, and
the remaining  defendants  moved for summary  judgment.  In September  2005, the
Court granted the motion for summary judgment of the defendants, including Kable
News, and judgment in favor of the defendants was entered on September 27, 2005.
Unimag filed an appeal of the judgment on July 5, 2006.

In April 2006,  Unimag entered into a consent judgment in favor of Kable News on
the counterclaims of Kable News for $4,159,770,  plus interest at the rate of 6%
per annum from  September  30,  1999,  and Kable News  agreed not to enforce the
judgment  until the action has been  concluded.  Unimag is no longer in business
and does not appear to have the assets to pay that judgment.

B. The Company and its  subsidiaries  are  involved in various  other claims and
legal  actions  arising in the normal  course of  business.  While the  ultimate
results of these matters cannot be predicted with certainty, management believes
that they will not have a material adverse effect on the Company's  consolidated
financial position, liquidity or results of operations.

Item 4.           Submission of Matters to a Vote of Security Holders
- -------           ---------------------------------------------------

There were no matters  submitted to a vote of security holders during the fourth
quarter of fiscal 2006.

Executive Officers of the Registrant

Set forth below is certain  information  concerning  persons who are the current
executive officers of the Company.

Name             Office Held / Principal Occupation for Past Five Years    Age
- ----             ------------------------------------------------------    ---
James Wall       Senior Vice President of the Company since 1991;          69
                 Chairman, President and Chief Executive Officer of
                 AMREP Southwest Inc., a wholly-owned subsidiary of
                 the Company, since 1991.


Peter M. Pizza   Vice President and Chief Financial Officer of the         55
                 Company since May 2001; Vice President and Controller
                 of the Company from 1997 to 2001.


Joseph S. Moran  Vice President, General Counsel and Secretary of the      58
                 Company since June 2005; Mr. Moran previously served
                 as Vice President, General Counsel and Secretary of
                 SatCon Technology Corporation from 2001 to 2005.


Michael P. Duloc President and Chief Operating Officer of the Company's    49
                 Newsstand Distribution Services business since 1996
                 and of the Company's Fulfillment Services business
                 since 2000.


The executive officers are elected or appointed by the Board of Directors of the
Company or its appropriate subsidiary to serve until the appointment or election
and  qualification  of their  successors or their earlier death,  resignation or
removal.







                                       11
<PAGE>


                                     PART II
                                     -------

Item 5.           Market for Registrant's Common Equity and Related Stockholder
- -------           -------------------------------------------------------------
                  Matters
                  -------

The Company's  common stock is traded on the New York Stock  Exchange  under the
symbol "AXR". On July 1, 2006, there were approximately  1,450 holders of record
of the common stock.  The range of high and low closing  prices for the last two
fiscal years by quarter is presented below:


           FIRST            SECOND               THIRD              FOURTH
       ---------------   ---------------    ----------------    ----------------
       HIGH       LOW     HIGH      LOW      HIGH       LOW      HIGH       LOW
      ------    ------   ------   ------    ------    ------    ------    ------

2006 $ 30.40   $ 21.58  $ 33.00  $ 24.00   $ 33.88   $ 23.22   $ 46.75   $ 27.25
2005 $ 20.80   $ 17.03  $ 18.55  $ 17.10   $ 23.90   $ 17.18   $ 28.34   $ 22.58


Dividend Policy

On July 14,  2006,  the Board of Directors  declared a special cash  dividend of
$0.85 per common share payable on August 16, 2006 to  shareholders  of record at
the close of business on July 31,  2006.  Previously,  the Company had  declared
special dividends of $0.55, $0.40 and $0.25 per share following the close of the
Company's  fiscal  years ending  April 30,  2005,  2004 and 2003.  The Board has
stated it may consider  special  dividends  from  time-to-time  in the future in
light of conditions then existing, including earnings, financial condition, cash
position,  and  capital  requirements  and  other  needs.  Notwithstanding  such
statement and the status of such future  conditions,  no assurance is given that
there  will be any  such  future  dividends  declared  or that  future  dividend
declarations,  if any,  will be  commensurate  in amount or frequency  with past
dividends.

In addition to the foregoing four special annual dividends, on December 7, 2005,
the Board of  Directors  declared a special  cash  dividend  of $3.50 per common
share  payable  on  January  9, 2006 to  shareholders  of record at the close of
business on December 19, 2005. The Board indicated that the Company's  financial
condition,  substantial  cash position and anticipated  cash flow,  particularly
from its  real  estate  operations,  in  relation  to its  then-current  capital
requirements were major factors in its determination to reward shareholders with
this special cash dividend.

Sales of Unregistered Company Stock

Pursuant to the Company's 2002  Non-Employee  Directors' Stock Plan, the Company
issued an aggregate of 7,500 shares of its Common Stock to its six  non-employee
directors on March 15, 2006, as partial  payment for their services as directors
for the six months preceding such issuances. These issuances were not registered
under the  Securities  Act of 1933,  as  amended,  by  reason  of the  exemption
provided in Section 4(2) of such Act for transactions by an issuer not involving
any public offering.

Equity Compensation Plan Information

See Item 12 of Part III of this  annual  report on Form  10-K that  incorporates
such  information by reference from the Company's  Proxy  Statement for its 2006
Annual Meeting of Shareholders.

Item 6.           Selected Financial Data
- -------           -----------------------

The selected consolidated  financial data presented below for, and as of the end
of, each of the last five fiscal years has been derived from and is qualified by
reference to the consolidated  financial statements.  The consolidated financial
statements have been audited by McGladrey & Pullen, LLP, independent  registered
public  accounting firm. The information  should be read in conjunction with the
consolidated  financial  statements and related notes thereto and  "Management's
Discussion and Analysis of Financial Condition and Results of Operations", which
is Item 7 of Part  II of this  annual  report  on Form  10-K.  These  historical
results  are not  necessarily  indicative  of the  results to be expected in the
future.

                                       12
<PAGE>


<TABLE>

                                         (In thousands of dollars except per share amounts)
                                                        Year Ended April 30,
                          ----------------------------------------------------------------------------------
                                  2006             2005           2004            2003              2002
<S>                          <C>             <C>              <C>             <C>              <C>
                             --------------  ---------------  --------------- ---------------  -------------
Financial Summary (a):
  Revenues                    $  148,296       $   134,506      $  129,291      $   72,189      $   81,911
  Income from  Continuing
    Operations                $   22,494       $    15,588      $   11,297      $    6,227      $    3,721
  Income (loss) from
    Discontinued Operations,
    net of tax                $    3,556       $       (63)     $      380      $       46      $      (23)
  Net Income                  $   26,050       $    15,525      $   11,677      $    6,273      $    3,698
  Total Assets                $  189,041       $   194,309      $  171,165      $  159,550      $  149,832

Capitalization:
  Shareholders' Equity        $  118,970       $   117,405      $  105,522      $   93,828      $   93,479
  Notes Payable               $    6,016       $    12,054      $   12,643      $   18,427      $   16,619

Per Share:
  Earnings from Continuing
    Operations                $     3.39       $      2.36      $     1.71      $     0.94      $     0.57
  Income (loss) from
    Discontinued Operations   $     0.54       $     (0.01)     $     0.06      $     0.01      $    (0.01)
  Earnings Per Share-
    Basic and Diluted         $     3.93       $      2.35      $     1.77      $     0.95      $     0.56
  Book Value                  $    17.91       $     17.72      $    15.97      $    14.24      $    14.22
  Cash Dividend               $     4.05       $      0.40      $     0.25      $        -      $        -

Shares Outstanding                 6,644             6,626           6,606           6,588           6,574
</TABLE>

(a)  Amounts for 2002-2004 have been  reclassified  to present the  discontinued
     operation  of  the  Company's  utility  subsidiary.   See  note  2  to  the
     consolidated financial statements.

Item 7.      Management's Discussion and Analysis of Financial Condition and
- -------      ---------------------------------------------------------------
             Results of Operations
             ---------------------

INTRODUCTION
- ------------

For a description of the Company's  business,  refer to Item I of Part I of this
annual report on Form 10-K.

As  indicated  in Item I, the  Company is  primarily  engaged in three  business
segments:  the  Real  Estate  business  operated  by  AMREP  Southwest  and  the
Fulfillment Services and Newsstand  Distribution Services businesses operated by
Kable. Data concerning industry segments is set forth in note 17 of the notes to
the  consolidated   financial  statements.   The  Company's  foreign  sales  and
activities are not significant.

The following  provides  information that management  believes is relevant to an
assessment and understanding of the Company's consolidated results of operations
and financial  condition.  The discussion should be read in conjunction with the
consolidated financial statements and accompanying notes. All references in this
Item 7 to 2006,  2005 and 2004 mean the fiscal years ended April 30, 2006,  2005
and 2004.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES
- ------------------------------------------

The Company  prepares its financial  statements in  conformity  with  accounting
principles  generally  accepted  in the United  States of  America.  The Company
discloses  its  significant  accounting  policies  in the  notes to its  audited
consolidated financial statements.

The  preparation  of  such  financial  statements  requires  management  to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and disclosures of contingent  assets and liabilities at the date of
those  financial  statements  as well as the  reported  amounts of revenues  and
expenses during the reporting period.  Areas that require significant  judgments

                                       13
<PAGE>

and estimates to be made include:  (i) the determination of revenue  recognition
for the Newsstand Distribution Services business, which is based on estimates of
allowances  for  magazine  returns  to the  Company  from  wholesalers  and  the
offsetting  return of magazines by the Company to  publishers  for credit;  (ii)
allowances for doubtful accounts;  (iii) real estate cost of sales calculations,
which are based on land development  budgets and estimates of costs to complete;
(iv)  the  determination  of  revenue   recognition  under  the   percentage-of-
completion method for certain construction contracts,  which is determined based
on the  percentage  of  total  costs  incurred  to date in  proportion  to total
estimated costs to complete the project; (v) cash flow and valuation assumptions
in performing asset  impairment  tests of long-lived  assets and assets held for
sale;  (vi)  pension  plan  accounting;  and (vii) legal  contingencies.  Actual
results could differ from those estimates.

There are numerous critical  assumptions that may influence accounting estimates
in  these  and  other  areas.  Management  bases  its  critical  assumptions  on
historical  experience,  third-party  data and various other  estimates  that it
believes to be reasonable under the circumstances.  Certain of the most critical
assumptions  made  in  arriving  at  these  accounting   estimates  include  the
following:  (i) Newsstand  Distribution  Services revenues represent commissions
earned from the  distribution  of  publications  for client  publishers that are
recorded by the Company at the time the  publications  go on sale in  accordance
with  Statement  of Financial  Accounting  Standards  ("SFAS") No. 48,  "Revenue
Recognition When Right of Return Exists". The publications generally are sold on
a fully returnable basis, which is in accordance with prevailing trade practice.
Accordingly,  the Company  provides for  estimated  returns by charges to income
that are determined on an issue-by-issue basis utilizing  historical  experience
and current sales  information.  The financial impact to the Company of a change
in the  sales  estimate  for  magazine  returns  to it from its  wholesalers  is
substantially offset by the simultaneous change in the Company's estimate of its
cost of purchases since it passes on the returns to publishers for credit.  As a
result, the effect of a difference between the actual and estimated return rates
on  the  Company's   commission   revenues  is  the  amount  of  the  commission
attributable  to the  difference.  The effect of an  increase or decrease in the
Company's  estimated  rate of returns of 1% during any period would be dependent
upon the mix of magazines involved and the related selling prices and commission
rates,  but would  generally  result in a change in that period's net commission
revenues of approximately $125,000; (ii) management determines the allowance for
doubtful  accounts by attempting to identify  troubled accounts by analyzing the
credit risk of specific customers and by using historical  experience applied to
the aging of accounts and, where appropriate within the real estate business, by
reviewing  any  collateral  which may secure a  receivable;  (iii)  real  estate
development costs are incurred  throughout the life of a project,  and the costs
of initial sales from a project  frequently must include a portion of costs that
have been budgeted based on engineering  estimates or other studies, but not yet
incurred;   (iv)   percentage-of-completion   revenue  recognition  for  certain
construction  contracts is based on the  percentage  of total costs  incurred to
date in proportion  to total  estimated  costs to complete the  contract.  Total
estimated  costs,  and thus  contract  income,  are impacted by several  factors
including, but not limited to, changes in the costs of subcontractors, materials
and equipment,  productivity and scheduling; (v) asset impairment determinations
(including  that of  goodwill)  are based  upon the  intended  use of assets and
expected future cash flows; (vi) pension plan accounting and disclosure is based
upon  numerous  assumptions  and  estimates,  including  the  expected  rate  of
investment return on retirement plan assets, the interest rate used to determine
the  present   value  of   liabilities   (the   discount   rate),   and  certain
employee-related  factors such as turnover,  retirement age and  mortality.  The
effect of every 0.25% change in the investment rate of return on retirement plan
assets would increase or decrease the pension expense by  approximately  $70,000
per year, and a change in the discount rate of 0.25% at a fiscal  year-end would
result in an  increase  or decrease in the  subsequent  year's  pension  cost of
approximately  $45,000;  and (vii) the  Company  is  currently  involved  in one
significant  legal proceeding which is described in Item 3 of this annual report
on Form 10-K, and several routine  matters.  If the summary judgment in favor of
the  defendants,  including  the  Company,  were  reversed  upon  appeal  in the
significant  proceeding and if the plaintiffs  were then to prevail in the case,
the result could have a material  adverse  effect on the financial  condition of
the Company. It is possible that the consolidated  financial position or results
of operations for any particular  quarterly or annual period could be materially
affected by an outcome of other litigation that is significantly  different from
our assumptions.

Year Ended April 30, 2006 Compared to Year Ended April 30, 2005
- ---------------------------------------------------------------

Results of Operations

Net income in 2006 was $26,050,000,  or $3.93 per share,  compared to net income
of $15,525,000,  or $2.35 per share, in 2005. The 2006 results  consisted of net

                                       14
<PAGE>

income from continuing  operations of $22,494,000,  or $3.39 per share,  and net
income from discontinued  operations of $3,556,000,  or $0.54 per share,  versus
net income from continuing operations of $15,588,000,  or $2.36 per share, and a
net loss from discontinued  operations of $63,000,  or $0.01 per share, in 2005.
The substantial  increase in net income from  continuing  operations in 2006 was
attributable  to  significant  revenue  growth and the  resulting  gross profits
achieved  in  the  Company's  Real  Estate  operations.   Consolidated  revenues
increased to $148,296,000  in 2006 from  $134,506,000 in 2005 as a result of the
increased real estate revenues,  partially offset by decreased revenues from the
Company's Media Services operations (as described below).

Net income from  discontinued  operations  in 2006  reflected  the gain from the
disposition of the primary  assets of the Company's El Dorado,  New Mexico water
utility  subsidiary,  which were taken  through  condemnation  proceedings.  The
Company began accounting for this subsidiary as a discontinued  operation in the
quarter ended January 31, 2005.  Accordingly,  financial  information  for prior
periods has been reclassified to conform to this presentation.

Revenues from land sales at the Company's AMREP Southwest  subsidiary  increased
approximately 60%, from $36,154,000 in 2005 to $57,810,000 in 2006, resulting in
significantly  higher  gross  profits in 2006  compared to the prior year.  This
substantial  revenue  increase was due to increased  sales of both developed and
undeveloped lots in the Company's principal market of Rio Rancho, New Mexico. An
increase  in  revenues  from the sale of  developed  lots to  homebuilders  from
$14,994,000 in 2005 to $31,920,000 in 2006 demonstrated the continuing  strength
of the Rio Rancho market,  while  revenues from the sale of undeveloped  builder
lots increased from  $11,914,000 in 2005 to $19,514,000 in 2006  principally due
to one  large  transaction  that  was  part  of a  redevelopment  project  being
undertaken by another company.  Revenues from sales of commercial and industrial
properties  decreased slightly in 2006, from $7,183,000 in 2005 to $6,376,000 in
2006,  as the prior  year  included  one large  sale  that  represented  a major
component of the revenues  whereas 2006 activity  consisted of numerous  smaller
transactions. The average gross profit percentage on land sales decreased to 54%
in 2006 from 55% in 2005, reflecting the relative mix of lots sold in each year.
Revenues and related gross profits from land sales can vary  significantly  from
period to period as a result of many factors, including the nature and timing of
specific  transactions,  and prior results are not necessarily a good indication
of what may occur in future periods.

Revenues from Kable's Fulfillment Services and Newsstand  Distribution  Services
businesses  (collectively,  "Media Services operations") decreased approximately
9%, from  $96,913,000 in 2005 to $88,463,000 in 2006.  This revenue  decline was
due to a decrease in Fulfillment Services revenues of $8,564,000 (10%) offset in
part by a $114,000 (1%) increase in Newsstand Distribution Services revenues.

Although  there  are  multiple  revenue  streams  in  the  Fulfillment  Services
business, including revenues from the maintenance of customer computer files and
the performance of other  fulfillment-related  activities,  including  telephone
(call  center)  support and graphic  arts and  lettershop  services,  a customer
generally  contracts for and utilizes all available services as a total package,
and the Company would not provide its ancillary services to a customer unless it
was also providing the core service of  maintaining a data base of names.  Thus,
variations in fulfillment  revenues are the result of fluctuations in the number
and sizes of customers rather than in the demand for a particular service.  This
is also true in the Newsstand Distribution Services business where there is only
one  primary  service  provided  which  results  in  one  revenue  source,   the
commissions  earned on the distribution of magazines.  The Company competes with
other  companies,  including  three  much  larger  companies  in  the  Newsstand
Distribution  Services  business and one much larger company in the  Fulfillment
Services  business,  and the  competition  for new  customers is intense in both
segments,  which results in a price  sensitive  industry  which may restrict the
Company's ability to increase its prices.

The 10% revenue decline in Fulfillment  Services in 2006 was principally  caused
by  customer  losses  that  occurred  in earlier  periods  at  Kable's  Colorado
fulfillment  services  business that was acquired from  Electronic  Data Systems
Corporation  ("EDS") in fiscal 2003,  while  revenues of Newsstand  Distribution
Services  increased 1% primarily because decreases in gross billings to existing
customers were offset by additional  revenues  generated by new business.  Total
operating  expenses of the Media  Services  operation  decreased  by  $5,368,000
(6.8%) in 2006  compared to 2005,  with the  operating  expenses of  Fulfillment
Services decreasing $5,179,000 (7.4%) compared to the prior year principally due
to  decreases  in  payroll  and  other  variable  expenses  resulting  from  the
fulfillment  services revenue decrease as well as the  non-recurrence of certain
consulting expenses incurred in the prior year.  Fulfillment  operating expenses

                                       15
<PAGE>

amounted to 87% of related  revenues in 2006 compared to 84% in 2005.  Operating
expenses for Newsstand  Distribution  Services decreased $189,000 (2.1%) in 2006
compared to 2005  principally  as a result of certain  one-time  2005  marketing
costs,  and these expenses  amounted to 66% of related revenues in 2006 compared
to 68% in 2005.

Real estate  commissions and selling expenses  decreased from $1,863,000 in 2005
to  $1,427,000  in 2006,  representing  approximately  5.2% and 2.5% of  related
revenues in each year;  the higher rate in 2005 was  primarily  due to legal and
other closing costs  associated  with  condemnation  proceedings  related to the
Company's  last parcel of land in Florida.  Such costs  generally vary depending
upon the terms of specific sale transactions.  Real estate and corporate general
and  administrative  expenses  increased  by  $630,000 in 2006 as a result of an
increase  in the  Company's  stock  price  which is used to value the portion of
director compensation that is paid in stock, the addition of a corporate general
counsel and the  presence  in the prior year of a sublease on certain  corporate
office space which offset a portion of the Company's rental expense. General and
administrative  costs of Media Services  operations  decreased by  approximately
$821,000  (10%) from 2005 to 2006, and remained at  approximately  9% of Kable's
total revenues in both years.

Interest and other revenues,  which consist primarily of interest on real estate
mortgage  loans  and  rental  income,  increased  from  $1,439,000  in  2005  to
$2,023,000 in 2006 as a result of higher  average  balances of invested cash and
cash  equivalents  during 2006.  Other  expenses  primarily  consist of expenses
associated  with rental  operations  and real estate  taxes on land  parcels not
under development, and these expenses decreased from approximately $1,453,000 in
2005 to $1,114,000 in 2006,  principally due to costs incurred in 2005 to settle
certain  warranty  claims  related  to  the  Company's  previously  discontinued
homebuilding operations.

The Company's  effective tax rate from  continuing  operations was 31.3% in 2006
compared to 32.0% in 2005.  The decrease from the  statutory  rate in both years
was primarily due to tax benefits  associated with charitable  contributions  of
land.

Year Ended April 30, 2005 Compared to Year Ended April 30, 2004
- ---------------------------------------------------------------

Results of Operations

Consolidated  revenues  increased from  $129,291,000  in 2004 to $134,506,000 in
2005,  or 4%,  as a result  of  revenue  growth  in the  Company's  Real  Estate
operations  that was partially  offset by decreased  revenues from Kable's Media
Services  operations.  Net income  from  continuing  operations  increased  from
$11,297,000,  or $1.71 per share, in 2004 to $15,588,000, or $2.36 per share, in
2005,  primarily as a result of the increased  revenues and higher gross margins
on land sales in the Real Estate operations.

Revenues from land sales increased  approximately  29%, from $28,012,000 in 2004
to $36,154,000 in 2005. This  improvement was the result of an increased  volume
of sales of both  developed  and  undeveloped  lots in the  Company's  principal
market of Rio Rancho,  New Mexico,  including the sales of several large parcels
for commercial  development in Rio Rancho.  The gross profit percentages on land
sales  were 55% and 51% in 2005 and 2004.  As  previously  noted,  revenues  and
related  gross  profits  from land sales can vary  significantly  from period to
period as a result of many factors,  including the nature and timing of specific
transactions,  and prior results are not  necessarily a good  indication of what
may occur in future periods.

Revenues from Media Services  operations  decreased from  $99,791,000 in 2004 to
$96,913,000  in 2005.  This decrease of 3% was the net result of a 4% decline in
the  Fulfillment  Services  segment  offset  in  part  by a 7%  increase  in the
Newsstand  Distribution  Services segment.  The decline in Fulfillment  Services
revenues was  anticipated  and  principally the result of customer losses at the
Company's  Colorado  fulfillment  business  which had been  identified and known
prior to  Kable's  acquisition  of that  business  from EDS in 2003,  while  the
increase in revenues of Newsstand Distribution Services resulted from additional
business  obtained  in  connection  with the  purchase  of certain  distribution
contracts in the third quarter of 2005. Total operating expenses decreased 4% in
2005  compared to 2004,  with the  operating  expenses of  Fulfillment  Services
decreasing 6% compared to the prior year due in part to decreases in payroll and
other variable expenses resulting from the revenue decrease, reduced third-party
charges for outsourced  computer  processing and the inclusion in the prior year
of  approximately  $1,600,000 of costs of relocating  and  centralizing  certain
fulfillment  operations.  Fulfillment  operating  expenses  amounted  to  84% of

                                       16
<PAGE>

related revenues in 2005 compared to 86% in 2004.  Operating costs for Newsstand
Distribution  Services  increased  10% in 2005  compared  to 2004 as a result of
costs related to the increased revenues acquired in 2005,  including  additional
market  study  costs  incurred  in the third and fourth  quarters  of 2005,  and
amounted to 68% of related revenues in 2005 compared to 66% in 2004.

Real estate  commissions  and selling  expenses  increased  as a  percentage  of
related  revenues,  from 3.3% in 2004 to 5.2% in 2005,  due to the  closing of a
higher mix of land sales in the prior year without the  involvement of a broker.
Such  costs   generally   vary   depending  upon  the  terms  of  specific  sale
transactions.  Real estate and  corporate  general and  administrative  expenses
increased  in 2005 versus  2004,  principally  due to the effect of an actuarial
gain that occurred in the prior year  resulting  from the  curtailment of future
service  benefits under the Company's  pension plan, as discussed  below.  Media
Services general and  administrative  costs decreased by approximately  $300,000
from 2004 to 2005,  and remained at  approximately  9% of total revenues in both
years.

Interest  and other  revenues  consist  primarily  of  interest  on real  estate
mortgage  loans and rental  income,  and was  approximately  $1,488,000  in 2004
compared to $1,439,000 in 2005.  Other  expenses  primarily  consist of expenses
associated  with rental  operations  and real estate  taxes on land  parcels not
under development, and these expenses increased from approximately $1,140,000 in
2004 to $1,453,000 in 2005,  principally due to costs incurred in 2005 to settle
certain  warranty  claims  related  to  the  Company's  previously  discontinued
homebuilding operations.

Results for 2004 included the  recognition in the third quarter of a pretax gain
of approximately $1,700,000 (equivalent to $0.16 per share) from the accelerated
recognition  of a deferred  actuarial  gain  resulting  from the  curtailment of
future  service  benefits  under the Company's  pension plan.  This  transaction
resulted in consolidated  pension income of $485,000 in 2004 compared to pension
expense  of  $303,000  in  2005  (see  note  10 to  the  consolidated  financial
statements).

The Company's  effective tax rate from  continuing  operations was 32.0% in 2005
compared  to 37.0% in  2004.  The  decrease  in 2005  was  primarily  due to tax
benefits associated with the charitable contribution of land.

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

During the past several  years,  the Company has financed  its  operations  from
internally generated funds from real estate sales and magazine  operations,  and
from borrowings under its various loan agreements.

Cash Flows From Financing Activities
- ------------------------------------

AMREP  Southwest  has a loan  agreement  with a bank  with a  maximum  borrowing
capacity of $10,000,000  that may be used to support real estate  development in
New Mexico.  The loan is unsecured  and bears  interest at the bank's prime rate
less 0.75% or, at the borrower's option, a LIBOR-based  interest rate plus 2.0%.
At April 30, 2006, there were no balances  outstanding under this facility.  The
credit agreement contains certain covenants, the most significant of which limit
other borrowings and require the maintenance of a minimum tangible net worth (as
defined) and a certain level of unencumbered inventory.  This credit arrangement
expires in October 2008.

The companies  within the Media Services  operations  have a credit  arrangement
with a bank that matures in 2010 and allows separate revolving credit borrowings
of up to $11,000,000 for Fulfillment Services and up to $9,000,000 for Newsstand
Distribution  Services,  in each case based upon a prescribed  percentage of the
borrower's  eligible  accounts  receivable.  The  individual  credit  lines  are
collateralized  by  substantially  all of  each  borrower's  assets  (consisting
principally  of  accounts  receivable  and  machinery  and  equipment)  and bear
interest  at the  bank's  prime  rate  (7.75%  at April  30,  2006)  or,  at the
borrower's option, a reserve adjusted  overnight or 30-day LIBOR-based  interest
rate  (4.94% at April 30,  2006)  plus,  in either  case,  a margin  established
quarterly of from 1.75% to 2.50%  depending upon the  borrower's  funded debt to
EBITDA ratio, as defined.  At April 30, 2006, the borrowing  availability of the
Fulfillment  Services  business was  $10,216,000  against which  $1,898,000  was
outstanding,  the borrowing  availability of the Newsstand Distribution Services
business was $7,997,000 against which $479,000 was outstanding, and the interest
rate for  outstanding  borrowings  was 6.69% based on the  overnight  LIBOR rate
option.  The loan agreement  requires the  maintenance or achievement of certain
financial ratios and contains  certain other covenants,  the most significant of
which limit the amount of dividends  and other  payments that may be made by the
borrowers to their parent or other affiliates,  as well as capital  expenditures
and other  borrowings.  An additional  $2,007,600 is available under this credit
arrangement for capital expenditures.

                                       17
<PAGE>

In May,  2006,  the Media  Services  operations  loan  agreement  was amended to
provide for an additional  $10,000,000 revolving facility to a subsidiary of the
Newsstand  Distribution  Services  business  on the same terms  (except  for the
amount  borrowable  and the use of proceeds) as provided in the existing  credit
agreement. The proceeds of borrowings under this arrangement may be used only to
pay accounts  payable under a magazine  distribution  agreement  with one of the
borrower's publisher  customers.  Subject to such maximum loan amount, up to 40%
of the amount of the borrower's  accounts  receivable  from the  distribution of
magazines  covered  by the  distribution  agreement  with that  customer  may be
borrowed. The amendment also provided for a secured term loan to the Fulfillment
Services  business  of  $1,470,000,  bearing  interest  at the rate of 6.25% and
repayable in equal monthly installments through 2010, the proceeds of which were
applied to the financing of certain equipment.

Consolidated  notes  payable  outstanding  at April  30,  2006  were  $6,016,000
compared to $12,054,000 at April 30, 2005. All  outstanding  borrowings at April
30, 2006 and 2005 were related to Media Services operations.

Cash Flows From Operating Activities
- ------------------------------------

Inventories amounted to $47,533,000 at April 30, 2006 compared to $52,906,000 at
April 30, 2005.  Inventories  in the  Company's  core real estate  market of Rio
Rancho  decreased from $46,674,000 at April 30, 2005 to $40,981,000 at April 30,
2006 as the result of land sales. The balance of inventory principally consisted
of properties in Colorado in both years.

Receivables from Real Estate  operations  increased from $6,277,000 at April 30,
2005 to $14,592,000 at April 30, 2006,  principally due to the receipt of a note
in the amount of  $9,557,000 in  connection  with an April 2006 land sale.  This
note was paid in full in June 2006. Pursuant to the terms of the sale, the buyer
also provided a "loan reserve  letter of credit"  which  guarantees  the Company
payment for certain remaining development  obligations it retained in connection
with the sale,  which is being  accounted for on the  "percentage of completion"
method  (see  note  1  to  the  consolidated   financial  statements,   "Revenue
recognition  - real  estate").  Consideration  received  in  excess  of  amounts
recognized  as land sale  revenue on this  transaction  is  reported as deferred
revenue on the accompanying consolidated balance sheet.

Receivables  from Media Service  operations  decreased from $51,348,000 at April
30,  2005 to  $37,140,000  at April 30,  2006 as a result of reduced  wholesaler
billings  in  the  Newsstand   Distribution   Services  business  and  decreased
Fulfillment Services revenues as well as an improved rate of collection.

Accounts  payable and accrued  expenses  decreased from $50,733,000 at April 30,
2005 to $39,382,000 at April 30, 2006,  mainly because the prior year included a
$7,000,000  deposit held in connection with the condemnation  proceedings on the
assets of the Company's utility subsidiary.

Other assets  increased  from  $12,347,000  at April 30, 2005 to  $15,238,000 at
April 30, 2006,  principally as a result of amounts  deferred in connection with
the development of a new information systems platform for Fulfillment Services.

The unfunded pension liability of the Company's defined benefit  retirement plan
decreased  from  $5,780,000  at April 30, 2005 to  $3,234,000 at April 30, 2006,
principally  due to an  increase  in the fair  market  value of the plan  assets
during the year resulting  from a combination  of realized and unrealized  gains
from investment assets. As a result, the Company recorded  comprehensive  income
of $1,904,000 in 2006  compared to a  comprehensive  loss of $1,362,000 in 2005,
reflecting the change in the unfunded pension  liability in each year net of the
related deferred tax and unrecognized prepaid pension amounts.

Cash Flows From Investing Activities
- ------------------------------------

Capital expenditures for property, plant and equipment amounted to approximately
$3,683,000  and  $3,060,000  in 2006  and  2005  and  consisted  principally  of
expenditures for computer hardware and software for Kable's Fulfillment Services
segment. In addition,  capital  expenditures for investment assets were $213,000
in 2006 and $1,885,000 in 2005 and were  principally  related to the development
of commercial properties owned by the real estate business. The Company believes
that it has adequate  financing  capability to provide for  anticipated  capital
expenditures.

                                       18
<PAGE>

Future Payments Under Contractual Obligations
- ---------------------------------------------

The table below summarizes significant  contractual cash obligations as of April
30, 2006 for the items indicated (in thousands):

<TABLE>


    <S>                      <C>            <C>             <C>             <C>            <C>

          Contractual                         Less than       1-3             3-5           More than
          Obligations           Total          1 year        years           years           5 years
          -----------        -----------    ------------   -----------    ------------    -------------

    Notes payable            $    6,016      $    1,673     $   1,709      $    2,634      $        -
    Operating leases             25,055           5,396         6,482           4,827           8,350
                             -----------    ------------   -----------    ------------    -------------
    Total                    $   31,071      $    7,069     $   8,191      $    7,461      $    8,350
                             ===========    ============   ===========    ============    =============
</TABLE>


NEW AND EMERGING ACCOUNTING STANDARDS
- -------------------------------------

In May 2005, the Financial  Accounting  Standards Board ("FASB") issued SFAS No.
154,  "Accounting  Changes  and  Error  Corrections".   SFAS  No.  154  requires
restatement  of prior  periods'  financial  statements for changes in accounting
principle,  unless it is impracticable  to determine either the  period-specific
effects or the cumulative effect of the change. Also, SFAS No. 154 requires that
retrospective  application of a change in accounting principle be limited to the
direct effects of the change.  SFAS No. 154 is effective for accounting  changes
and  corrections  of errors made in fiscal years  beginning  after  December 15,
2005.

In June 2005,  the FASB ratified  Emerging  Issues Task Force ("EITF") Issue No.
04-10, "Determining Whether to Aggregate Operating Segments That Do Not Meet the
Quantitative  Thresholds".  The  standard is  effective  for fiscal years ending
after  September 15, 2005, and does not effect the current  presentation  of the
Company's reportable operating segments.

In November 2005, the FASB issued FASB Staff Position  ("FSP") FAS 115-1 and FAS
124-1,  "The Meaning of  Other-Than-Temporary  Impairment and Its Application to
Certain Investments".  The FSP provides guidance regarding when an investment is
impaired, whether that impairment is other than temporary and measurement of the
impairment  loss. The FSP applies to debt and equity  securities,  except equity
securities  accounted  for under the equity  method.  The FSP is  effective  for
reporting  periods  beginning  after December 15, 2005. The Company is currently
evaluating the application of this FSP to determine its potential  impact on its
consolidated financial statements.

In addition to these recently  issued  accounting  standards,  there are several
emerging   accounting  issues  that  could  potentially   impact  the  Company's
consolidated  financial statements in the future,  including (i) a proposed SFAS
on "Fair Value Measurements" (exposure draft); (ii) a proposed Interpretation on
"Accounting  for Uncertain Tax Positions - an  interpretation  of FASB Statement
No. 109 (exposure  draft)";  and (iii) a proposed SFAS  "Accounting for Pensions
and Other Postretirement Benefits (preliminary views)".

The Company will monitor these  emerging  issues to assess any potential  future
impact on its consolidated financial statements.

SEGMENT INFORMATION
- -------------------

Information  by industry  segment is  presented  in note 17 to the  consolidated
financial statements. This information has been prepared in accordance with SFAS
No. 131,  "Disclosures about Segments of an Enterprise and Related Disclosures",
which  requires  that  industry  segment  information  be  prepared  in a manner
consistent  with the  manner in which  financial  information  is  prepared  and
evaluated by management for making operating decisions.  A number of assumptions
and  estimations are required to be made in the  determination  of segment data,
including  the need to make  certain  allocations  of common  costs and expenses
among  segments.  On an annual  basis,  management  has evaluated the basis upon
which costs are allocated,  and has periodically made revisions to these methods
of allocation. Accordingly, the determination of "pretax income (loss)

                                       19
<PAGE>

contribution"  of each  segment  as  summarized  in note 17 to the  consolidated
financial  statements  is  presented  for  informational  purposes,  and  is not
necessarily the amount that would be reported if the segment were an independent
company.

IMPACT OF INFLATION
- -------------------

Operations of the Company can be impacted by inflation. Within the industries in
which  the  Company  operates,  inflation  can  cause  increases  in the cost of
materials,  services,  interest  and  labor.  Unless  such  increased  costs are
recovered  through  increased sales prices or improved  operating  efficiencies,
operating  margins will  decrease.  Within the land  development  industry,  the
Company  encounters  particular risks. A large part of the Company's real estate
sales are to homebuilders who face their own  inflationary  concerns that rising
housing costs,  including interest costs, may substantially outpace increases in
the income of potential purchasers and make it difficult for them to finance the
purchase of a new home or sell their  existing  home. If this  situation were to
exist,  the demand for the Company's land by these  homebuilder  customers could
decrease.  In general,  in recent years interest rates have been at historically
low levels and other price  increases  have been  commensurate  with the general
rate of inflation in the Company's markets,  and as a result the Company has not
found the inflation risk to be a significant problem in its real estate or Media
Services operations businesses.

FORWARD-LOOKING STATEMENTS AND RISK FACTORS
- -------------------------------------------

The Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe
harbor for forward-looking  statements made by or on behalf of the Company.  The
Company  and its  representatives  may from  time to time make  written  or oral
statements that are  "forward-looking",  including  statements contained in this
report and other  filings with the  Securities  and Exchange  Commission  and in
reports to the Company's  shareholders  and news releases.  All statements  that
express  expectations,  estimates,  forecasts or projections are forward-looking
statements  within the meaning of the Act. In  addition,  other  written or oral
statements  which  constitute  forward-looking  statements  may be made by or on
behalf  of the  Company.  Words  such as  "expects",  "anticipates",  "intends",
"plans",  "believes",  "seeks",  "estimates",  "projects",  "forecasts",  "may",
"should",  variations  of such words and  similar  expressions  are  intended to
identify such forward-looking statements. These statements are not guarantees of
future  performance and involve certain risks,  uncertainties  and contingencies
that are difficult to predict.  These risks and uncertainties  include,  but are
not  limited  to,  those set  forth in Item 1A above  under  the  heading  "Risk
Factors".  Many of the factors that will determine the Company's  future results
are beyond the ability of  management to control or predict.  Therefore,  actual
outcomes and results may differ  materially from what is expressed or forecasted
in or suggested by such  forward-looking  statements.  The Company undertakes no
obligation to revise or update any  forward-looking  statements,  or to make any
other forward-looking statements, whether as a result of new information, future
events or otherwise.





















                                       20
<PAGE>

Item 7(A).      Quantitative and Qualitative Disclosures About Market Risk
- ----------      ----------------------------------------------------------

The  primary  market  risk  facing  the  Company  is  interest  rate risk on its
long-term debt and fixed rate  receivables.  The Company does not hedge interest
rate risk using  financial  instruments.  The Company is also subject to foreign
currency risk, but this risk is not material.  The following table sets forth as
of April 30, 2006 the  Company's  long-term  debt  obligations  and  receivables
(excluding trade accounts) by scheduled maturity, weighted average interest rate
and estimated Fair Market Value ("FMV") (amounts in thousands):

<TABLE>
<S>                 <C>       <C>       <C>       <C>       <C>       <C>      <C>     <C>


                                                                      There-              FMV @
                    2007       2008     2009      2010      2011      after    Total     4/30/06
                    ----       ----     ----      ----      ----      -----    -----     -------

Fixed rate
 receivables      $ 10,956   $  3,217  $     37  $    -    $    -    $    -   $ 14,210  $ 14,094

Weighted average
 interest rate        8.0%       8.4%      8.3%       -         -         -       8.1%        -

Fixed rate debt   $  1,673   $  1,419  $    290  $   257   $    -    $    -   $  3,639  $  3,385


Weighted average
 interest rate        5.2%       4.6%      6.9%     6.9%        -         -       5.2%        -

Variable rate
 debt             $    -     $     -   $     -   $    -    $ 2,377   $    -   $  2,377  $  2,377

Weighted average
 interest rate         -           -         -        -       6.7%        -       6.7%      6.7%


</TABLE>



























                                       21
<PAGE>

Item 8.           Financial Statements and Supplementary Data
- -------           -------------------------------------------



             Report of Independent Registered Public Accounting Firm
             -------------------------------------------------------


To the Shareholders
AMREP Corporation
Princeton, New Jersey

We  have  audited  the  accompanying   consolidated   balance  sheets  of  AMREP
Corporation  and  subsidiaries  as of April 30,  2006 and 2005,  and the related
consolidated statements of income,  shareholders' equity and cash flows for each
of the three years in the period ended April 30, 2006.  Our audits also included
the financial  statement  schedule  listed in the Index at Item 15(a)(2).  These
financial  statements  and  schedule  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedule based on our audits.

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.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of AMREP Corporation
and  subsidiaries  as of April  30,  2006 and  2005,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
April  30,  2006,  in  conformity  with  U.S.  generally   accepted   accounting
principles.   Also,  in  our  opinion,  the  related  financial  schedule,  when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information therein.


/s/ McGladrey & Pullen, LLP

Davenport, Iowa
June 13, 2006


























                                       22
<PAGE>

<TABLE>

<CAPTION>


                       AMREP CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             APRIL 30, 2006 AND 2005
                          (Dollar amounts in thousands)

<S>                                                             <C>                  <C>

                                    ASSETS                            2006                 2005
                                     ------                     ----------------    -----------------

CASH AND CASH EQUIVALENTS                                        $      46,882       $      37,743

RECEIVABLES, net:
   Real estate operations                                               14,592               6,277
   Media services operations                                            37,140              51,348
                                                                ----------------    -----------------
                                                                        51,732              57,625

REAL ESTATE INVENTORY                                                   47,533              52,906

INVESTMENT ASSETS, net                                                  11,586              11,356

PROPERTY, PLANT AND EQUIPMENT, net                                      10,879              11,600

OTHER ASSETS, net                                                       15,238              12,347

ASSETS OF DISCONTINUED OPERATIONS                                           -                5,541

GOODWILL                                                                 5,191               5,191
                                                                ----------------    -----------------

     TOTAL ASSETS                                                 $    189,041        $    194,309
                                                                ================    =================

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

LIABILITIES:
ACCOUNTS PAYABLE AND ACCRUED EXPENSES                             $     39,382        $     50,733
DEFERRED REVENUE                                                         7,741                  -

NOTES PAYABLE:
   Amounts due within one year                                           1,673               2,099
   Amounts subsequently due                                              4,343               9,955
                                                                ----------------    -----------------
                                                                         6,016              12,054

TAXES PAYABLE                                                            4,548               2,220
DEFERRED INCOME TAXES                                                    9,150               6,117
ACCRUED PENSION COST                                                     3,234               5,780
                                                                ----------------    -----------------

     TOTAL LIABILITIES                                                  70,071              76,904
                                                                ----------------    -----------------
SHAREHOLDERS' EQUITY:
   Common stock, $.10 par value;
     shares authorized - 20,000,000; shares issued -  7,417,204 at
     April 30, 2006 and 7,414,704 at April 30, 2005                        741                 741
   Capital contributed in excess of par value                           45,772              45,395
   Retained earnings                                                    81,875              82,695
   Accumulated other comprehensive loss, net                            (4,072)             (5,976)
   Treasury stock, at cost                                              (5,346)             (5,450)
                                                                ----------------    -----------------
     TOTAL SHAREHOLDERS' EQUITY                                        118,970             117,405
                                                                ----------------    -----------------

     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                    $   189,041         $   194,309
                                                                ================    =================
</TABLE>

       The accompanying notes to consolidated financial statements are an
            integral part of these consolidated financial statements.

                                       23
<PAGE>

<TABLE>


                                                  AMREP CORPORATION AND SUBSIDIARIES
                                                   CONSOLIDATED STATEMENTS OF INCOME
                                           (Amounts in thousands, except per share amounts)
<S>                                                             <C>                <C>                <C>


                                                                                 Year Ended April 30,
                                                               -------------------------------------------------------
                                                                    2006                2005               2004
                                                               ---------------     ---------------    ----------------
   REVENUES:
      Real estate operations-
        Land sales                                             $    57,810         $    36,154        $     28,012

      Media services operations                                     88,463              96,913              99,791

      Interest and other                                             2,023               1,439               1,488
                                                               ---------------     ---------------    ----------------
                                                                   148,296             134,506             129,291
                                                               ---------------     ---------------    ----------------

   COSTS AND EXPENSES:
      Real estate cost of sales-
        Land sales                                                  26,732              16,105              13,634
      Operating expenses-
        Media services operations                                   73,956              79,324              83,020
        Real estate commissions and selling                          1,427               1,863                 923
        Other                                                        1,114               1,453               1,140
      General and administrative-
        Media services operations                                    7,686               8,507               8,801
        Real estate operations and corporate                         4,310               3,680               2,894
      Interest, net                                                    344                 660                 944
                                                               ---------------     ---------------    ----------------

                                                                   115,569             111,592             111,356
                                                               ---------------     ---------------    ----------------

   INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES            32,727              22,914              17,935

   PROVISION  FOR INCOME TAXES FROM CONTINUING OPERATIONS           10,233               7,326               6,638
                                                               ---------------     ---------------    ----------------

   INCOME FROM CONTINUING OPERATIONS                                22,494              15,588              11,297
   INCOME (LOSS) FROM OPERATIONS OF DISCONTINUED BUSINESS
        (NET OF INCOME TAXES)                                        3,556                 (63)                380
                                                               ---------------     ---------------    ----------------

   NET INCOME                                                  $    26,050         $    15,525         $    11,677
                                                               ===============     ===============    ================

   EARNINGS PER SHARE FROM CONTINUING OPERATIONS               $      3.39         $      2.36         $      1.71
   EARNINGS (LOSS) PER SHARE FROM DISCONTINUED OPERATIONS              .54               (0.01)               0.06
                                                               ---------------     ---------------    ----------------
   EARNINGS PER SHARE - BASIC AND DILUTED                      $      3.93         $      2.35         $      1.77
                                                               ===============     ===============    ================

   WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING              6,633               6,616               6,595
                                                               ===============     ===============    ================



                                   The accompanying notes to consolidated financial statements are an
                                       integral part of these consolidated financial statements.
</TABLE>

                                       24
<PAGE>

<TABLE>

                                                  AMREP CORPORATION AND SUBSIDIARIES
                                            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                        (Amounts in thousands)

<S>                                <C>       <C>       <C>              <C>          <C>               <C>           <C>


                                                           Capital                    Accumulated       Treasury
                                      Common Stock     Contributed in                    Other           Stock,
                                  -------------------     Excess of     Retained     Comprehensive         at
                                   Shares     Amount      Par Value     Earnings          Loss            Cost         Total
                                  -------    --------  ---------------  --------     -------------     ----------    ----------

BALANCE, April 30, 2003            7,407     $    741  $     44,992     $ 59,786     $    (6,034)      $  (5,657)    $  93,828

    Net income                         -            -             -       11,677               -               -        11,677

    Other comprehensive income         -            -             -            -           1,420               -         1,420
                                                                                                                     ----------

    Total comprehensive income                                                                                          13,097
                                                                                                                     ----------

    Cash dividends                     -            -             -       (1,648)              -               -        (1,648)


    Issuance of stock under
     Directors' Plan                   -            -           126            -               -             104           230

    Exercise of stock options          2            -            15            -               -               -            15
                                  -------    --------  ---------------  --------     -------------     ----------    ----------

BALANCE, April 30, 2004            7,409          741        45,133       69,815          (4,614)         (5,553)      105,522

    Net income                         -            -             -       15,525               -               -        15,525

    Other comprehensive (loss)         -            -             -            -          (1,362)              -        (1,362)
                                                                                                                     ----------

    Total comprehensive income                                                                                          14,163
                                                                                                                     ----------

    Cash dividends                     -            -             -       (2,645)              -               -        (2,645)

    Issuance of stock under
     Directors' Plan                   -            -           227          -                 -             103           330

    Exercise of stock options          6            -            35          -                 -              -             35
                                  -------    --------  ---------------  --------     -------------     ----------    ----------

BALANCE, April 30, 2005            7,415          741         45,395      82,695          (5,976)         (5,450)      117,405

    Net income                         -            -              -      26,050               -               -        26,050

    Other comprehensive income         -            -              -           -           1,904               -         1,904
                                                                                                                     ----------

    Total comprehensive income                                                                                          27,954
                                                                                                                     ----------

    Cash dividends                     -            -              -     (26,870)              -               -       (26,870)

    Issuance of stock under
     Directors' Plan                   -            -            337           -               -             104           441

    Exercise of stock options          2            -             40           -               -               -            40
                                  -------    --------  ---------------  --------     -------------     ----------    ----------

BALANCE, April 30, 2006            7,417     $    741   $     45,772    $ 81,875     $    (4,072)      $  (5,346)    $ 118,970
                                  =======    ========  ===============  ========     =============     ==========    ==========

                    The accompanying notes to consolidated financial statements are an
                           integral part of these consolidated financial statements.
</TABLE>



                                       25
<PAGE>


<TABLE>

                                                  AMREP CORPORATION AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       (Amounts in thousands)

<S>                                                                                 <C>               <C>                <C>

                                                                                                    Year Ended April 30,
                                                                                    ------------------------------------------------
                                                                                        2006              2005               2004
                                                                                    -----------       -------------     ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                                       $   26,050         $   15,525        $   11,677
   Adjustments to reconcile net income
    to net cash provided by operating activities-
    Depreciation and amortization                                                        5,568              5,343             5,015
    Non-cash credits and charges:
     (Gain) loss on disposition of assets                                               (5,345)                 -               619
     Provision for doubtful accounts                                                      (104)              (172)              680
     Pension (benefit) accrual                                                             627                303             ( 485)
     Stock based compensation - Directors' Plan                                            441                330               230
    Changes in assets and liabilities, excluding the effect of acquisitions:
     Receivables                                                                         4,202             (8,388)           (7,311)
     Real estate inventory                                                               6,942             (1,258)            4,863
     Other assets                                                                       (4,027)            (2,876)           (1,451)
     Accounts payable and accrued expenses and deferred revenue                          3,400              1,499             2,806
     Taxes payable`                                                                      2,328                353             1,262
     Deferred income taxes                                                               1,764              1,333             3,542
                                                                                    -----------       -------------     ------------
       Net cash provided by operating activities                                        41,846             11,992            21,447
                                                                                    -----------       -------------     ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures - property, plant, and equipment                                (3,683)            (3,060)           (3,402)
   Capital expenditures - investment assets                                               (213)            (1,885)             (266)
   Deposit from condemnation of Utility Company                                              -              7,000                 -
   Proceeds from disposition of property, plant and equipment                            4,057               190                  -
   Acquisitions, net                                                                         -              (100)                 -
                                                                                    -----------       -------------     ------------
       Net cash provided (used) by investing activities                                    161              2,145            (3,668)
                                                                                    -----------       -------------     ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from debt financing                                                         29,162             25,596            27,831
   Principal debt payments                                                             (35,200)           (26,185)          (33,615)
   Exercise of stock options                                                                40                 35                15
   Cash dividends                                                                      (26,870)            (2,645)           (1,648)
                                                                                    -----------       -------------     ------------
       Net cash (used) by financing activities                                         (32,868)            (3,199)           (7,417)
                                                                                    -----------       -------------     ------------

INCREASE IN CASH AND CASH EQUIVALENTS                                                    9,139             10,938            10,362
CASH AND CASH EQUIVALENTS, beginning of year                                            37,743             26,805            16,443
                                                                                    -----------       -------------     ------------
CASH AND CASH EQUIVALENTS, end of year                                              $   46,882         $   37,743        $   26,805
                                                                                    ===========       =============     ============

SUPPLEMENTAL CASH FLOW INFORMATION:
   Interest paid - net of amounts capitalized                                       $      377         $      568        $      822
                                                                                    ===========       =============     ============

   Income taxes paid - net of refunds                                               $    8,230         $    6,817        $    2,049
                                                                                    ===========       =============     ============
   Non-cash transaction:
     Note payable for acquisition of   Distribution contracts                       $        -         $    1,170        $        -
     Foreclosure on land sale contract                                              $    1,795         $        -        $        -
     Transfer of development costs from inventory to investment assets              $      262         $        -        $        -
                                                                                    ===========       =============     ============

                                   The accompanying notes to consolidated financial statements are an
                                       integral part of these consolidated financial statements.
</TABLE>


                                       26
<PAGE>

                       AMREP CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)      SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING POLICIES:
         -------------------------------------------------------------------

         Organization and principles of consolidation
         --------------------------------------------

The consolidated financial statements include the accounts of AMREP Corporation,
an Oklahoma corporation, and its subsidiaries (individually and collectively, as
the context  requires,  the  "Company").  The  Company,  through  its  principal
subsidiaries,  is primarily engaged in three business segments.  AMREP Southwest
Inc. ("AMREP  Southwest")  operates in the real estate industry,  principally in
New Mexico, and Kable Media Services, Inc. ("Kable") operates in the fulfillment
services and magazine  distribution  services businesses  (collectively,  "media
services  operations").  All significant  intercompany accounts and transactions
have been eliminated in consolidation.

The  consolidated  balance sheets are presented in an unclassified  format since
the Company has  substantial  operations  in the real  estate  industry  and its
operating cycle is greater than one year.

         Fiscal Year
         -----------

The Company's  fiscal year ends on April 30. All  references  to 2006,  2005 and
2004 mean the  fiscal  years  ended  April 30,  2006,  2005 and 2004  unless the
context otherwise indicates.

            Revenue recognition
            -------------------

Real Estate
- -----------

Land sales are recognized when all elements of Statement of Financial Accounting
Standards  ("SFAS")  No. 66,  "Accounting  for Sales of Real  Estate",  are met,
including  when  the  parties  are  bound  by the  terms  of the  contract,  all
consideration  (including  adequate  cash) has been  exchanged,  title and other
attributes  of ownership  have been  conveyed to the buyer by means of a closing
and the Company is not obligated to perform further  significant  development of
the specific  property sold. Profit is recorded either in its entirety or on the
installment  method depending upon, among other things,  the ability to estimate
the collectibility of the unpaid sales price. In the event the buyer defaults on
the  obligation,  the  property is taken back and  recorded as  inventory at the
unpaid receivable balance, net of any deferred profit, but not in excess of fair
market value less estimated costs to sell.

Cost of land  sales  includes  all  direct  acquisition  costs and  other  costs
specifically identified with the property,  including  pre-acquisition costs and
capitalized real estate taxes and interest,  and an allocation of certain common
development costs associated with the entire project.  Common  development costs
include the installation of utilities and roads, and may be based upon estimates
of cost to complete. The allocation of costs is based on the relative fair value
of the property before development.  Estimates and cost allocations are reviewed
on a regular basis until a project is substantially  completed,  and are revised
and reallocated as necessary on the basis of current estimates.

During  2006,  the Company  entered  into one sale that  requires the Company to
complete  certain  development  work subsequent to closing.  Additional sales of
this  nature  are  likely  to be  entered  into in  fiscal  year  2007.  In such
situations,  sales  are  recorded  under  the  percentage-of-completion  method.
Revenues and cost of sales are recorded as development  work is performed  based
on the percentage that incurred costs to date bear to the Company's estimates of
total costs and contract value. Cost estimates include direct and indirect costs
such as labor,  materials and overhead.  If a contract  extends over an extended
period,  revisions in cost estimates  during the progress of work would have the
effect of adjusting  earnings  applicable to performance in prior periods in the
current period.  When the current contract estimate indicates a loss,  provision
is made for the total  anticipated  loss in the  current  period.  Consideration
received in excess of amounts  recognized as land sale revenues is accounted for
as deferred revenue.




                                       27
<PAGE>

Media Services
- --------------

Revenues from media services  operations  include revenues from the distribution
of periodicals and subscription fulfillment and other activities.  Revenues from
subscription  fulfillment  activities represent fees earned from the maintenance
of computer files for customers,  which are billed and earned monthly, and other
fulfillment   activities   including   customer   telephone   support,   product
fulfillment,  and graphic arts and lettershop services,  all of which are billed
and earned as the services are provided. In accordance with Emerging Issues Task
Force (EITF) Issue No. 99-19, "Reporting Revenue Gross as a Principal versus Net
as an Agent", certain reimbursed postage costs are accounted for on a net basis.
Distribution  revenues  represent  commissions  earned from the  distribution of
publications  for client  publishers and are recorded by the Company at the time
the publications go on sale at the retail level, in accordance with SFAS No. 48,
"Revenue Recognition When Right of Return Exists".  Because the publications are
sold throughout the distribution chain on a fully-returnable basis in accordance
with prevailing  industry  practice,  the Company provides for estimated returns
from  wholesalers at the time the  publications  go on sale by charges to income
that  are  based  on  historical  experience  and  most  recent  sales  data for
publications on a  issue-by-issue  basis, and then  simultaneously  provides for
estimated credits from publishers for the related returns. Accordingly, revenues
represent the  difference  between the  Company's  estimates of its net sales to
independent wholesalers and its net purchases from publisher clients.  Estimates
are continually  reevaluated  throughout the sales process, and final settlement
is typically made 90 days after a magazine's "off-sale" date.

         Cash and cash equivalents
         -------------------------

Cash equivalents consist of short-term,  highly liquid investments which have an
original maturity of ninety days or less, and that are readily  convertible into
cash.

         Receivables
         -----------

Receivables  are carried at original  invoice or closing  statement  amount less
estimates  made  for  doubtful  receivables  and,  in the  case of  distribution
receivables,  return  allowances.   Management  determines  the  allowances  for
doubtful  accounts by reviewing and identifying  troubled  accounts on a monthly
basis and by using  historical  experience  applied to an aging of  accounts.  A
receivable is considered to be past due if any portion of the receivable balance
is outstanding  for more than 90 days.  Receivables  are written off when deemed
uncollectible.  Recoveries of  receivables  previously  written off are recorded
when received.

         Real estate inventory
         ---------------------

Land and improvements on land held for future  development or sale are stated at
the lower of  accumulated  cost (except in certain  instances  where property is
repossessed as discussed above under "Revenue recognition"),  which includes the
development cost, certain amenities,  capitalized  interest and capitalized real
estate taxes, or fair market value less estimated costs to sell.

         Investment assets
         -----------------

Investment assets consist of investment land and commercial rental properties.

Investment land represents vacant,  undeveloped land not held for development or
sale in the normal  course of business  and which is stated at the lower of cost
or fair  market  value  less the  estimated  costs to  sell.  Commercial  rental
properties are recorded at cost less accumulated  depreciation.  Depreciation of
commercial  rental  properties is provided by the  straight-line  basis over the
estimated  useful  lives,  which  generally  are 10 years or less for  leasehold
improvements and 40 years for buildings.

         Property, plant and equipment
         -----------------------------

Items capitalized as part of property, plant and equipment are recorded at cost.
Expenditures  for  maintenance  and repair  and minor  renewals  are  charged to
expense as incurred,  while those expenditures that improve or extend the useful
life of  existing  assets are  capitalized.  Upon sale or other  disposition  of
assets, their cost and the related accumulated  depreciation or amortization are
removed from the accounts and the  resulting  gain or loss, if any, is reflected
in operations.

                                       28
<PAGE>

Depreciation  and  amortization  of property,  plant and  equipment are provided
principally by the straight-line  method at various rates calculated to amortize
the book values of the  respective  assets over their  estimated  useful  lives,
which  generally  are 10 years or less for  furniture  and  fixtures  (including
equipment) and 25 to 40 years for buildings.

         Goodwill
         --------

The excess of amounts paid for business  acquisitions over the net fair value of
the assets acquired and liabilities assumed ("goodwill") is carried as an asset.
Goodwill  arose in connection  with the  acquisition of Kable in 1969 and, since
this  acquisition was made prior to the effective date of Accounting  Principles
Board Opinion ("APB") No. 17, was not amortized.

Effective  May 1, 2002,  the Company  adopted SFAS No. 142,  "Goodwill and Other
Intangible  Assets".  Under SFAS No. 142, goodwill and intangible assets with an
indefinite  life are no longer  subject to  amortization  and are  reviewed  for
impairment at least annually.  An impairment  charge is recognized only when the
calculated fair value of a reporting unit, including goodwill,  is less than its
carrying amount. Based on a review completed in April 2006, the Company believes
that no goodwill impairment existed at April 30, 2006.

         Long-lived assets
         -----------------

Long-lived  assets,  including  real  estate  inventory,  investment  assets and
property,  plant and equipment,  are evaluated in accordance  with SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived  Assets",  and reviewed
for  impairment  when events or changes in  circumstances  indicate the carrying
value of an asset may not be recoverable. Provisions for impairment are recorded
when  undiscounted cash flows estimated to be generated by those assets are less
than the carrying amount of the assets.  The amount of impairment would be equal
to the difference  between the assets'  carrying  value and the discounted  cash
flows.

         Income taxes
         ------------

Deferred tax assets and liabilities are determined based on differences  between
financial reporting and tax bases of assets and liabilities, and are measured by
using  currently  enacted tax rates  expected to apply to taxable  income in the
years in which those differences are expected to reverse.

         Earnings per share
         ------------------

Basic  earnings  per  share is based on the  weighted  average  number of common
shares  outstanding  during each year.  Diluted  earnings  per share is computed
assuming  the  issuance  of  common  shares  for  all  dilutive   stock  options
outstanding (using the treasury stock method) during the reporting period.

         Stock options
         -------------

The  Company  issues  stock  options  to   non-employee   directors   under  the
Non-Employee Directors Option Plan (see note 10). The Company accounts for stock
option grants in  accordance  with APB No. 25,  "Accounting  for Stock Issued to
Employees",  and has adopted the  disclosure-only  provisions of SFAS No. 123 as
amended by SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure".  Stock options  granted have been issued with an exercise  price at
the fair market value of the Company's stock at the date of grant.  Accordingly,
no  compensation  expense has been  recognized  with respect to the stock option
plan.  Further,  the amount of  additional  compensation  disclosable  under the
disclosure-only  provisions  of SFAS  No.  123 is  immaterial  for  all  periods
presented.

         Comprehensive income (loss)
         ---------------------------

Comprehensive  income  (loss) is defined as the change in equity during a period
from transactions and other events from non-owner sources.  Comprehensive income
(loss) is the total of net income and other  comprehensive  income (loss) which,
for the Company,  is comprised  entirely of the minimum pension liability net of
the related deferred income taxes.


                                       29
<PAGE>

         Management's estimates and assumptions
         --------------------------------------

The  preparation  of  consolidated   financial  statements  in  conformity  with
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. The significant  estimates that
affect the  financial  statements  include,  but are not limited to, real estate
inventory  valuation and related  revenue  recognition,  allowances for magazine
returns and  doubtful  accounts,  the  recoverability  of  long-term  assets and
amortization periods,  pension plan assumptions and legal contingencies.  Actual
results could differ from these estimates;  however, there have been no material
changes made to the Company's accounting estimates in the past three years.

         New and Emerging Accounting Standards
         -------------------------------------

In May 2005, the Financial  Accounting  Standards Board ("FASB") issued SFAS No.
154,  "Accounting  Changes  and  Error  Corrections".   SFAS  No.  154  requires
restatement  of prior  periods'  financial  statements for changes in accounting
principle,  unless it is impracticable  to determine either the  period-specific
effects or the cumulative effect of the change. Also, SFAS No. 154 requires that
retrospective  application of a change in accounting principle be limited to the
direct effects of the change.  SFAS No. 154 is effective for accounting  changes
and  corrections  of errors made in fiscal years  beginning  after  December 15,
2005.

In June 2005,  the FASB ratified EITF Issue No. 04-10,  "Determining  Whether to
Aggregate Operating Segments That Do Not Meet the Quantitative  Thresholds." The
standard is effective for fiscal years ending after September 15, 2005, and does
not  effect the  current  presentation  of the  Company's  reportable  operating
segments.

In November 2005, the FASB issued FASB Staff Position  ("FSP") FAS 115-1 and FAS
124-1,  "The Meaning of  Other-Than-Temporary  Impairment and Its Application to
Certain  Investments." The FSP provides guidance regarding when an investment is
impaired, whether that impairment is other than temporary and measurement of the
impairment  loss. The FSP applies to debt and equity  securities,  except equity
securities  accounted  for under the equity  method.  The FSP is  effective  for
reporting  periods  beginning  after December 15, 2005. The Company is currently
evaluating the  application of the FSP to determine its potential  impact on its
consolidated financial statements.

In addition  to the  recently  issued  accounting  standards,  there are several
emerging   accounting  issues  that  could  potentially   impact  the  Company's
consolidated  financial statements in the future,  including (i) a proposed SFAS
on "Fair Value Measurements" (exposure draft); (ii) a proposed Interpretation on
"Accounting  for Uncertain Tax Positions - an  interpretation  of FASB Statement
No. 109 (exposure  draft)";  and (iii) a proposed SFAS  "Accounting for Pensions
and Other Postretirement Benefits (preliminary views)".

The Company will monitor these  emerging  issues to assess any potential  future
impact on its consolidated financial statements.

(2)        DISCONTINUED OPERATIONS:
           ------------------------

Net income  from  discontinued  operations  in 2006  reflects  the gain from the
disposition of the primary  assets of the Company's El Dorado,  New Mexico water
utility subsidiary, which were taken through condemnation proceedings. Financial
information  for  operations  of this  subsidiary  for  prior  periods  has been
reclassified to conform to this presentation.

Revenues  of the water  utility  subsidiary  were:  2005 -  $1,210,000  (through
November  30, 2004) and 2004 -  $1,816,000.  Pretax  income  (loss) of the water
utility subsidiary was: 2005 - $(100,000) (through November 30, 2004) and 2004 -
$595,000.







                                       30
<PAGE>


(3)      RECEIVABLES:
         ------------

<TABLE>
<S>                                                            <C>                 <C>


Receivables consist of:                                                     April 30,
                                                               -------------------------------------
                                                                     2006                 2005
                                                               ----------------    -----------------
                                                                            (Thousands)
Real estate operations-
   Mortgage and other receivables                               $      14,688       $      6,373
   Allowance for doubtful accounts                                        (96)               (96)
                                                               ----------------    -----------------
                                                                $      14,592       $      6,277
                                                               ================    =================
Media services operations (maturing within one year)-
    Fulfillment services                                        $      20,266       $     24,487
    Newsstand Distribution Services, net of estimated returns          18,409             28,502
                                                               ----------------    -----------------
                                                                       38,675             52,989
     Allowance for doubtful accounts                                   (1,535)            (1,641)
                                                               ----------------    -----------------
                                                                $      37,140       $     51,348
                                                               ================    =================
</TABLE>


The Company  extends  credit to various  companies  in its real estate and media
services  businesses  that may be  affected  by  changes  in  economic  or other
external  conditions.  Financial  instruments  that may potentially  subject the
Company  to a  significant  concentration  of risk  primarily  consist  of trade
accounts  receivable  from  wholesalers in the magazine  distribution  industry.
Approximately  47% and 44% of media  services net accounts  receivable  were due
from  three  customers  at  April  30,  2006  and  2005.  As  a  result  of  the
concentration of accounts  receivable in three  customers,  the Company could be
adversely  affected by adverse  changes in their  financial  condition  or other
factors negatively  affecting these companies.  As industry practices allow, the
Company's  policy is to  manage  its  exposure  to credit  risk  through  credit
approvals  and limits and, on occasion  (particularly  in  connection  with real
estate land  sales),  the taking of  collateral.  The Company  also  provides an
allowance  for  doubtful  accounts  for  potential  losses  based  upon  factors
surrounding the credit risk of specific  customers,  historical trends and other
financial and non-financial information.

Real  estate  mortgages  receivable  includes  one  mortgage  in the  amount  of
$9,557,000  that was received as partial  payment in connection with a land sale
in April 2006 and paid in full in June 2006.  Pursuant to the terms of the sale,
the buyer also provided a "loan reserve  letter of credit" which  guarantees the
Company  payment for certain  remaining  development  obligations it retained in
connection  with the sale,  which is being  accounted for on the  "percentage of
completion"  method (see note 1,  "Revenue  recognition  - Real  Estate").  Real
estate  mortgage  receivables  bear interest at rates ranging from 8.0% to 10.0%
and result  primarily  from land sales.  Maturities  of principal on real estate
receivables  at April  30,  2006 were as  follows:  2007 -  $11,402,000;  2008 -
$3,249,000; 2009 - $37,000.

Because the  publications  distributed  by the Company are sold  throughout  the
distribution  chain on a  fully-returnable  basis in accordance  with prevailing
industry  practice,  the Company provides for estimated returns from wholesalers
at the time the  publications  go on sale by charges to income that are based on
historical  experience  and  most  recent  sales  data  for  publications  on an
issue-by-issue  basis, and then  simultaneously  provides for estimated  credits
from  publishers  for  the  related  returns.  Newsstand  Distribution  Services
accounts receivable are net of estimated magazine returns of $54,071,000 in 2006
and $57,524,000 in 2005.

Media services operations receivables collateralize  line-of-credit arrangements
utilized for the Newsstand  Distribution and Fulfillment service operations (see
note  9).  Both of  these  business  segments  provide  services  to  publishing
companies owned or controlled by a major  shareholder and member of the Board of
Directors.   Commissions  and  other  revenues  earned  on  these   transactions
represented  approximately 2% of consolidated revenues in each of 2006, 2005 and
2004.

In  connection  with one  customer  arrangement  in the  Newsstand  Distribution
Services  business,  a publisher has  guaranteed the collection of the Company's
related accounts  receivable from wholesalers to whom the Company has resold the
publisher's magazines by allowing an offset of past due or uncollectible amounts
from  wholesalers  against  amounts  due  the  publisher  for  the  purchase  of
magazines. Pursuant to this arrangement, the Company has the right of offset and
has offset  $20,368,000  of accounts  receivable  at April 30, 2006  against the
related accounts payable.


                                       31
<PAGE>

(4)     REAL ESTATE INVENTORY:
        ----------------------

Real  estate  inventory  consists  of land  and  improvements  held  for sale or
development.  Accumulated  capitalized  interest  costs  included in real estate
inventory at April 30, 2006 and 2005 were  $2,644,000 and  $2,825,000.  Interest
costs capitalized during 2006, 2005 and 2004 were $21,000, $65,000 and $126,000.
Accumulated  capitalized real estate taxes included in the inventory of land and
improvements  at April 30, 2006 and 2005 were  $2,191,000 and  $2,635,000.  Real
estate taxes  capitalized  during 2006, 2005 and 2004 were $16,000,  $18,000 and
$42,000.  Previously capitalized interest costs and real estate taxes charged to
real estate cost of sales were $662,000,  $883,000,  and $608,000 in 2006,  2005
and 2004, and $64,000 was charged to commercial rental properties in 2005.

Substantially all of the Company's real estate assets are located in Rio Rancho,
New Mexico. As a result of this geographic  concentration,  the Company could be
affected by changes in economic conditions in that region.

(5)      INVESTMENT ASSETS:
         ------------------

<TABLE>
<S>                                                   <C>                 <C>
Investment assets consist of:
                                                                    April 30,
                                                      -------------------------------------
                                                            2006                 2005
                                                      --------------       ----------------
                                                                   (Thousands)

Land held for long-term investment                     $     6,800          $      6,573
                                                      --------------       ----------------
Commercial rental properties-
    Land, buildings and improvements                         7,051                 6,839
    Furniture and fixtures                                     216                   216
                                                      --------------       ----------------
                                                             7,267                 7,055
    Less accumulated depreciation                           (2,481)               (2,272)
                                                      --------------       ----------------
                                                             4,786                 4,783
                                                      --------------       ----------------
                                                       $    11,586          $     11,356
                                                      ==============       ================


Land held for long-term  investment  represents  property  located in areas that
will not be developed in the near term and thus has not been offered for sale.

Depreciation  charged to operations amounted to $209,000,  $140,000 and $137,000
in 2006, 2005 and 2004.

(6)      PROPERTY, PLANT AND EQUIPMENT:
         ------------------------------

Property, plant and equipment consists of:
                                                                    April 30,
                                                      ------------------------------------
                                                             2006               2005
                                                      --------------       ---------------
                                                                  (Thousands)

Land, buildings and improvements                       $     4,397          $      4,139
Furniture and equipment                                     30,117                27,317
Other                                                           96                   116
                                                      --------------       ---------------
                                                            34,610                31,572
Less accumulated depreciation                              (23,731)              (19,972)
                                                      --------------       ---------------
                                                       $    10,879          $     11,600
                                                      ==============       ===============


Depreciation  charged to  operations  amounted  to  $4,222,000,  $4,001,000  and
$4,100,000 in 2006, 2005 and 2004.

</TABLE>



                                       32
<PAGE>

(7)      OTHER ASSETS:
         -------------

<TABLE>
<S>                                                   <C>                 <C>
Other assets consist of:
                                                                    April 30,
                                                      ------------------------------------
                                                            2006                 2005
                                                      --------------       ---------------
                                                                 (Thousands)

Software development costs                             $     7,787          $      7,296
Deferred order entry costs                                   3,872                 3,745
Prepaid expenses                                             2,137                 1,587
Other                                                        3,841                 3,674
                                                      --------------       ---------------
                                                            17,637                16,302
Less accumulated amortization                               (2,399)               (3,955)
                                                      --------------       ---------------
                                                       $    15,238          $     12,347
                                                      ==============       ===============

Software   development   costs  include  internal  and  external  costs  of  the
development  of new or enhanced  software  programs and are generally  amortized
over five  years.  Deferred  order  entry  costs  represent  costs  incurred  in
connection with the data entry of customer subscription information to data base
files and are  charged  directly to  operations  over a 12-month  period.  Other
includes  the costs of customer  contracts  acquired  in  November  2004 and are
amortized over four years.

Amortization related to deferred charges was $1,137,000, $1,202,000 and $778,000
in 2006, 2005 and 2004.

Amortization  of Other assets for each of the next five years is estimated to be
as follows:  2007 -  $2,098,000;  2008 - $2,079,000;  2009 - $1,640,000;  2010 -
$1,512,000; and 2011 - $1,148,000.

(8)      ACCOUNTS PAYABLE AND ACCRUED EXPENSES:
         --------------------------------------

Accounts payable and accrued expenses consist of:
                                                                   April 30,
                                                      ------------------------------------
                                                             2006                 2005
                                                      --------------       ---------------
                                                                 (Thousands)

Publisher payables, net                                $    27,273          $     27,722
Accrued expenses                                             4,320                 6,849
Trade payables                                               2,602                 3,827
Other                                                        5,187                 5,335
Deposit on utility company condemnation                         -                  7,000
                                                      --------------       ---------------
                                                       $    39,382          $     50,733
                                                      ==============       ===============

(9)      DEBT FINANCING:
         ---------------

Debt financing consists of:
                                                                   April 30,
                                                      ------------------------------------
                                                            2006                  2005
                                                      --------------       ---------------
                                                                  (Thousands)
Notes payable -
   Line-of-credit borrowings -
     Real estate operations and other                  $        -           $         -
     Media services operations                               2,377                 7,505
   Other notes payable                                       3,639                 4,549
                                                      --------------       ---------------
                                                       $     6,016          $     12,054
                                                      ==============       ===============
</TABLE>

Maturities of principal on notes  outstanding at April 30, 2006 were as follows:
2007 - $1,673,000; 2008 - $1,419,000; 2009 - $290,000; 2010 - $257,000; and 2011
- - $2,377,000.



                                       33
<PAGE>

         Lines-of-credit and other borrowings
         ------------------------------------

AMREP  Southwest  has a loan  agreement  with a bank  with a  maximum  borrowing
capacity of $10,000,000  that may be used to support real estate  development in
New Mexico. The loan is uncollateralized  and bears interest at the bank's prime
rate less 0.75% or, at the borrower's  option, a LIBOR-based  interest rate plus
2.0%.  At  April  30,  2006,  there  were no  balances  outstanding  under  this
arrangement.   The  credit  agreement  contains  certain  covenants,   the  most
significant  of which limit other  borrowings  and require the  maintenance of a
minimum  tangible  net worth (as defined)  and a certain  level of  unencumbered
inventory. This credit arrangement matures in October 2008.

Kable's  subsidiaries  that  comprise its  Fulfillment  Services  and  Newsstand
Distribution  Services  segments  have a  credit  arrangement  with a bank  that
matures  in 2010  and  allows  separate  revolving  credit  borrowings  for each
business of up to $11,000,000 for Fulfillment  Services and up to $9,000,000 for
Newsstand Distribution Services, in each case based upon a prescribed percentage
of the borrower's eligible accounts receivable.  The individual credit lines are
collateralized  by  substantially  all of  each  borrower's  assets  (consisting
principally  of  accounts  receivable  and  machinery  and  equipment)  and bear
interest  at the  bank's  prime  rate  (7.75%  at April  30,  2006)  or,  at the
borrower's option, a reserve adjusted  overnight or 30-day LIBOR-based  interest
rate  (4.94% at April 30,  2006)  plus,  in either  case,  a margin  established
quarterly of from 1.75% to 2.50%  dependent upon the  borrower's  funded debt to
EBITDA ratio, as defined.  At April 30, 2006, the borrowing  availability of the
Fulfillment  Services  business was  $10,216,000  against which  $1,898,000  was
outstanding,  the borrowing  availability of the Newsstand Distribution Services
business was $7,997,000 against which $479,000 was outstanding, and the interest
rate for  outstanding  borrowings  was 6.69% based on the  overnight  LIBOR rate
option.  The loan agreement  requires the  maintenance or achievement of certain
financial ratios and contains certain  covenants,  the most significant of which
limit  the  amount  of  dividends  and  other  payments  that may be made by the
borrowers to their parent or other affiliates,  as well as capital  expenditures
and other  borrowings.  An additional  $2,007,600 is available under this credit
arrangement for capital expenditures.

Other notes  payable  consist of  equipment  financing  loans and a note payable
related to the acquisition of distribution  contracts,  with a weighted  average
interest rate of 5.2% in 2006 and 4.8% in 2005.

In May, 2006,  Kable's credit agreement was amended to provide for an additional
$10,000,000  revolving  loan  to a  subsidiary  of  the  Newsstand  Distribution
Services  business  on  the  same  terms  as  provided  in the  existing  credit
agreement.  The  proceeds  of  borrowings  under  this  arrangement  may be used
exclusively  for the payment of accounts  payable under a magazine  distribution
agreement  with  one of the  borrower's  publisher  customers.  Subject  to such
maximum  loan  amount,  up to 40%  of the  amount  of  the  borrower's  accounts
receivable  from the  distribution  of  magazines  covered  by the  distribution
agreement with that customer may be borrowed.  The amendment also provided for a
secured term loan to the Fulfillment  Services  business of $1,470,000,  bearing
interest  at the rate of 6.25%  and  repayable  in  equal  monthly  installments
through  2010,  the proceeds of which were  applied to the  financing of certain
equipment.

(10)     BENEFIT PLANS:
         --------------

         Retirement plan
         ---------------

The Company has a retirement plan for which accumulated benefits were frozen and
future service credits were curtailed as of March 1, 2004. Prior to that date it
had covered  substantially  all full-time  employees and provided benefits based
upon  a  percentage  of the  employee's  annual  salary.  The  following  tables
summarize the balance sheet impact as well as the benefit  obligations,  assets,
funded status and assumptions associated with the retirement plan.










                                       34
<PAGE>


Net periodic  pension cost (income) for 2006, 2005 and 2004 was comprised of the
following components:

<TABLE>
<S>                                                      <C>                <C>                <C>
                                                                       Year Ended April 30,
                                                         -----------------------------------------------------
                                                              2006               2005               2004
                                                         ---------------    ----------------   ---------------
                                                                              (Thousands)
Service cost (including plan expenses)                    $        212       $         124      $        784
Interest cost on projected
   benefit obligation                                            1,780               1,817             1,762
Expected return on assets                                       (1,994)             (2,064)           (1,793)
Amortization of prior service cost                                   -                   -              (293)
Recognized net actuarial loss                                      629                 426               741
                                                         ---------------    ----------------   ---------------
Pension cost for normal activity                                   627                 303             1,201
(Gain) on curtailment                                                -                   -            (1,686)
                                                         ---------------    ----------------   ---------------
Total cost (benefit) recognized in pretax  income                  627                 303              (485)
Cost (benefit) recognized in pretax other
    comprehensive income                                        (3,173)              2,271            (2,368)
                                                         ---------------    ----------------   ---------------
                                                          $     (2,546)      $       2,574      $     (2,853)
                                                         ===============    ================   ===============

Assumptions used in determining net periodic pension cost were:

                                                                      Year Ended April 30,
                                                       -----------------------------------------------------------
                                                             2006                 2005                 2004
                                                       -----------------    -----------------    -----------------

Discount rates                                               5.75%                5.75%                6.25%
Expected long-term rate of return
   on assets                                                  8.0%                 8.0%                 8.0%
</TABLE>


The following  table sets forth changes in the plan's  benefit  obligations  and
assets,  and  summarizes  components  of  amounts  recognized  in the  Company's
consolidated balance sheets:

<TABLE>
<S>                                                                    <C>              <C>

                                                                                 April 30,
                                                                       -------------------------------
                                                                           2006              2005
                                                                       -------------    --------------
                                                                                (Thousands)
Change in benefit obligation:
    Benefit obligation at beginning of year                             $  31,808         $   30,048
    Interest cost                                                           1,780              1,817
    Actuarial loss                                                            418              1,821
    Benefits paid                                                          (1,847)            (1,878)
                                                                       -------------    --------------
    Benefit obligation at end of year                                   $  32,159         $   31,808
                                                                       -------------    --------------

Change in plan assets:
    Fair value of plan assets at beginning of year                      $  26,028         $   26,842
    Actual return on plan assets                                            4,924              1,276
    Benefits paid                                                          (1,847)            (1,878)
    Expenses paid                                                            (180)              (212)
                                                                       -------------    --------------
    Fair value of plan assets at end of year                            $  28,925         $   26,028
                                                                       -------------    --------------

Funded status                                                           $  (3,234)        $   (5,780)
Unrecognized net actuarial loss                                             6,788              9,961
                                                                       -------------    --------------
Net amount recognized in the balance sheets                             $   3,554         $    4,181
                                                                       =============    ==============

Amounts recognized on the balance sheets:
    Accrued pension costs                                               $  (3,234)        $   (5,780)
    Pre-tax accumulated comprehensive loss                                  6,788              9,961
                                                                       -------------    --------------
                                                                        $   3,554         $    4,181
                                                                       =============    ==============

</TABLE>




                                       35
<PAGE>

The average asset allocation for the retirement plan was as follows:
                                                            April 30,
                                                 -------------------------------
                                                      2006             2005
                                                 -------------    --------------
    Equity securities                                  78%              75%
    Fixed income securities                            19               22
    Other (principally cash and cash equivalents)       3                3
                                                 -------------    --------------
    Total                                             100%             100%
                                                 =============    ==============

The Company  recorded other  comprehensive  income (loss) of $1,904,000 in 2006,
($1,362,000)  in 2005 and  $1,420,000  in 2004 to account  for the net effect of
changes to the unfunded pension liability.

The  investment mix between  equity  securities  and fixed income  securities is
based upon achieving a desired return by balancing higher return,  more volatile
equity securities and lower return, less volatile fixed income securities.  Plan
assets are invested in portfolios of diversified  public-market equity and fixed
income  securities.  Investment  allocations are made across a range of markets,
industry  sectors,  capitalization  sizes,  and,  in the  case of  fixed  income
securities,  maturities and credit quality.  The plan holds no securities of the
Company.

The plan's expected  return on assets,  as shown above, is based on management's
expectation  of  long-term  average  rates  of  return  to be  achieved  by  the
underlying investment  portfolios.  In establishing this assumption,  management
considers  historical  and expected  returns for the asset  classes in which the
plan is invested, as well as current economic and market conditions.

The Company funds the retirement plan according to IRS funding  limitations.  In
2004,  $1,025,000  was paid by the Company to the plan.  No  contributions  were
required  in 2006 or 2005.  The  amount of future  annual  benefit  payments  is
expected to be between $2.0 million and $2.3 million in 2007 through  2011,  and
an aggregate of  approximately  $11.5 million is expected to be paid in the five
year period 2012-2016.

          Savings and salary deferral plan
          ---------------------------------

The Company has a Savings and Salary  Deferral Plan,  commonly  referred to as a
401(k) plan, in which all full-time employees with more than one year of service
are eligible to participate  and contribute to through  salary  deductions.  The
Company may make discretionary matching  contributions,  subject to the approval
of its Board of Directors.  As of March 1, 2004,  the Company  matches 66.67% of
eligible  employees'  defined  contributions  up to a  maximum  of  4%  of  such
employees'  compensation.  Prior to March 1, 2004, the matching contribution was
33.33%  of  each  employee's  defined  contribution  up  to a  maximum  of 2% of
compensation.  The Company's  contribution to the plan amounted to approximately
$832,000, $841,000 and $389,000 in 2006, 2005 and 2004.

         Directors' stock plan
         ---------------------

During  2003,  the  Company  adopted  the AMREP  Corporation  2002  Non-Employee
Directors' Stock Plan and reserved 65,000 shares of common stock for issuance to
non-employee  directors.  Under the plan, each  non-employee  director  receives
1,250 shares of stock on each March 15 and  September 15 as partial  payment for
services rendered.  The expense recorded based upon the fair market value of the
stock at time of issuance under this plan was $441,000, $330,000 and $230,000 in
2006,  2005 and 2004  (15,000  shares  issued in each year).  At April 30, 2006,
12,500 shares remained available for grant.

         Stock option plan
         -----------------

The Company had in effect a stock option plan that  provided  for the  automatic
issuance  of  an  option  to  purchase  500  shares  of  common  stock  to  each
non-employee  director  annually at the fair market  value at the date of grant.
The options are  exercisable in one year and expire five years after the date of
grant.  The Board of Directors  terminated  the plan following the annual grants
that were made in September 2005.



                                       36
<PAGE>

<TABLE>
<CAPTION>
 A summary of activity in the Company's stock option plan is as follows:


                                                                   Year Ended April 30,
                                    -----------------------------------------------------------------------
                                            2006                    2005                      2004
                                    --------------------   -----------------------   ----------------------
<S>                                   <C>       <C>         <C>           <C>          <C>        <C>
                                               Weighted                  Weighted                Weighted
                                     Number     Average     Number        Average      Number     Average
                                       of      Exercise       of         Exercise        of      Exercise
                                     Shares      Price      Shares         Price       Shares      Price
                                     ------      -----      ------         -----       ------      -----
Options outstanding at
  beginning of year                   7,000     $ 14.92      9,500        $ 9.12        9,000     $ 6.30

Granted                               3,000       24.88      3,000         17.55        3,000      15.19
Exercised                            (2,500)      16.13     (5,500)         6.34       (2,500)      6.23
Expired or canceled                    (500)      17.56          -             -            -          -
                              -------------------      -------------------        -----------------
Options outstanding at
  end of year                         7,000       18.56      7,000         14.92        9,500       9.12
                              ===================      ===================        =================

Available for grant at
  end of year                             -                 12,000                     15,000
                              ===================      ===================        =================

Options exercisable at
  end of year                         4,000                  4,000                      6,500
                              ===================      ===================        =================

Range of exercise prices
  for options exercisable
  at end of year               $3.95 to $24.88           $3.95 to $17.55           $3.95 to $8.45
                              ===================      ===================        =================
</TABLE>

Options  outstanding at April 30, 2006 were  exercisable over a four-year period
beginning  one  year  from  date  of  grant.  The  weighted  average   remaining
contractual  life of options  outstanding  at April 30, 2006,  2005 and 2004 was
3.9,  3.6,  and 3.2 years.  The weighted  average fair value of options  granted
during  the year was $8.07 in 2006,  $5.57 in 2005 and  $4.82 in 2004.  The fair
value  of each  option  grant  is  estimated  on the  date of  grant  using  the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions used for grants in 2006, 2005 and 2004:  expected volatility of 42%,
42% and 44%; risk-free interest rates of 5.0%, 2.8% and 2.0%; and expected lives
of 3 years.

Stock options granted have been issued with an exercise price at the fair market
value of the Company's stock at the date of grant. Accordingly,  no compensation
expense has been recognized with respect to the stock option plan. Further,  the
amount  of  additional   compensation   disclosable  under  the  disclosure-only
provisions of SFAS No. 123 is immaterial for all periods presented.

(11)    INCOME TAXES:
        -------------

The provision for income taxes consists of the following:
<TABLE>
<S>                                                     <C>                  <C>                 <C>

                                                                         Year Ended April 30,
                                                        -------------------------------------------------------
                                                             2006                2005                2004
                                                        ----------------    ---------------     ---------------
                                                                            (Thousands)
Current:
    Federal                                               $   9,735           $   5,770            $  2,961
    State and local                                             823                 488                 350
                                                        ----------------    ---------------     ---------------
                                                             10,558               6,258               3,311
                                                        ----------------    ---------------     ---------------
Deferred:
    Federal                                                   1,587                 928               3,011
    State and local                                             176                 103                 531
                                                        ----------------    ---------------     ---------------
                                                              1,763               1,031               3,542
                                                        ----------------    ---------------     ---------------
Total provision for income taxes                          $  12,321           $   7,289            $  6,853
                                                        ================    ===============     ===============

</TABLE>



                                       37
<PAGE>

The provision for income taxes has been allocated as follows:
<TABLE>
<S>                                                     <C>                  <C>                 <C>

                                                                         Year Ended April 30,
                                                        -------------------------------------------------------
                                                             2006                2005                2004
                                                        ----------------    ---------------     ---------------
                                                                            (Thousands)

Continuing operations                                     $  10,233           $   7,326            $  6,638
Discontinued operations                                       2,088                 (37)                215
                                                        ----------------    ---------------     ---------------
Total provision for income taxes                          $  12,321           $   7,289            $  6,853
                                                        ================    ===============     ===============
</TABLE>

The components of the net deferred income tax liability are as follows:

                                                             April 30,
                                                --------------------------------
                                                    2006                2005
                                                ------------       -------------
                                                          (Thousands)
Deferred income tax assets-
     State tax loss carryforwards               $     3,844         $    4,902
     Accrued pension costs                            1,302              2,316
     Other                                            1,855              1,562
                                                -------------      -------------
     Total deferred income tax assets                 7,001              8,780
                                                -------------      -------------

Deferred income tax liabilities-
     Real estate basis differences                   (2,097)            (2,022)
     Reserve for periodical returns                  (1,434)            (1,470)
     Depreciable assets                              (3,485)            (3,369)
     Deferred condemnation gain                      (1,450)                 -
     Capitalized costs for financial reporting
       purposes, expensed for tax                    (4,060)            (3,281)
                                                --------------     -------------
     Total deferred income tax liabilities          (12,526)           (10,142)
                                                --------------     -------------

     Valuation allowance for realization of
        state tax loss carry forwards                (3,625)            (4,755)
                                                --------------     -------------
Net deferred income tax liability               $    (9,150)        $   (6,117)
                                                ==============     =============

The following  table  reconciles  taxes computed at the U.S.  federal  statutory
income tax rate from continuing operations to the Company's actual tax provision
(benefit):
<TABLE>
<S>                                                     <C>                  <C>                 <C>

                                                                         Year Ended April 30,
                                                        --------------------------------------------------------
                                                             2006                2005                2004
                                                        -----------------   ---------------     ----------------
                                                                                   (Thousands)
Computed tax provision at
  statutory rate                                          $  11,455           $   8,020            $  6,098
Increase (reduction) in tax resulting from:
     State income taxes, net of federal
       income tax effect                                        552                 395                 717
     Real estate charitable land contribution                (1,543)             (1,093)               (237)
     Other                                                     (231)                  4                  60

                                                        -----------------   ---------------     ----------------
Actual tax provision                                      $  10,233           $   7,326            $  6,638
                                                        =================   ===============     ================
</TABLE>

 (12)    SHAREHOLDERS' EQUITY:
         ---------------------

The Company  recorded other  comprehensive  income (loss) of $1,904,000 in 2006,
($1,362,000)  in 2005 and  $1,420,000  in 2004 to account  for the net effect of
changes to the unfunded pension liability (see note 10).

In connection with the 2002 Non-Employee Directors' Stock Plan, 15,000 shares of
common stock were issued from treasury  stock in each of 2006,  2005 and 2004 to
members of the Board of Directors as partial  compensation  for  services.  As a
result,  there were 773,592 and 788,592 shares held in the treasury at April 30,
2006 and 2005.

                                       38
<PAGE>

(13)     ACQUISITION:
         ------------

In November 2004, Kable's Distribution Services subsidiary purchased a portfolio
of magazine  distribution  contracts for a total purchase price of approximately
$1,270,000,  consisting of cash ($100,000) and a note payable ($1,170,000).  The
purchase  price  was  capitalized  and  is  included  in  Other  Assets  on  the
accompanying consolidated balance sheets.

(14)     COMMITMENTS AND CONTINGENCIES:
         ------------------------------

         Land sale contracts
         -------------------

As of April 30, 2006, the Company had entered into a sales contract for the sale
of  approximately  400  single-family   lots  for  a  total  purchase  price  of
approximately $18 million. This sale closed in April 2006; however,  because the
Company retained an ongoing obligation to complete  development of this project,
revenue is  recognized  under the  percentage  of  completion  method.  In 2006,
billings  under  the  contract  totaled  $11,945,000,  of which  $4,204,000  was
recognized as revenue and  $7,741,000  was deferred.  The balance of the revenue
will be recognized as development work is completed. See notes 1 and 3.

The Company has also entered into  conditional  sales  contracts for the sale of
approximately  2,200 lots in Rio Rancho, New Mexico which would close at varying
times through  fiscal 2009;  however,  since each of the  contracts  permits the
purchaser to terminate its  obligations  by  forfeiture  of a relatively  modest
deposit, there are no assurances that all, or even a substantial portion, of the
lots  subject  to the  contracts  will be sold  pursuant  to the  contracts.  No
recognition has been given to the  conditional  sales contracts in the financial
statements.

         Non-cancelable leases
         ---------------------

The Company is obligated under  long-term,  non-cancelable  leases for equipment
and various real estate properties.  Certain real estate leases provide that the
Company will pay for taxes,  maintenance and insurance costs and include renewal
options.  Rental expense for 2006, 2005 and 2004 was  approximately  $8,596,000,
$9,359,000 and $12,075,000.

The total minimum rental  commitments for years  subsequent to April 30, 2006 of
$25,055,000  are due as follows:  2007 - $5,396,000;  2008 - $3,586,000;  2009 -
$2,896,000; 2010 - $2,485,000; 2011 - $2,342,000; and thereafter - $8,350,000.

         Lot exchanges
         -------------

In connection with certain  individual  homesite sales made prior to 1977 at Rio
Rancho, New Mexico, if water,  electric and telephone utilities have not reached
the lot site when a purchaser is ready to build a home, the Company is obligated
to exchange a lot in an area then serviced by such  utilities for the lot of the
purchaser,  without  cost  to  the  purchaser.  The  Company  has  not  incurred
significant costs related to the exchange of lots.

(15)     LITIGATION:
         -----------

A subsidiary  of Kable is a defendant  in a lawsuit in which the  plaintiff is a
former  wholesaler  no longer in business who alleges that the Company and other
national  magazine  distributors  and  wholesalers  engaged in violations of the
Robinson-Patman  Act (which  generally  prohibits  discriminatory  pricing) that
caused it to go out of business.  The  plaintiff  sought  damages from the Kable
defendant of approximately $15.2 million;  any damages awarded would be trebled.
In  September  2005,  the Court  granted the motion for summary  judgment of the
defendants,  including Kable, and judgment in favor of the defendants, including
Kable,  was entered.  The plaintiff has appealed the judgment.  No provision has
been made in the financial statements for this contingency.

The Company and its  subsidiaries are involved in various other claims and legal
actions incident to their  operations  which, in the opinion of management based
in part upon  advice of counsel,  will not  materially  affect the  consolidated
financial position or results of operations of the Company and its subsidiaries.



                                       39
<PAGE>

(16)     FAIR VALUE OF FINANCIAL INSTRUMENTS:
         ------------------------------------

The estimated fair value of financial  instruments is determined by reference to
various market data and other valuation techniques as appropriate.  The carrying
amounts of cash and cash equivalents, media services trade receivables and trade
payables approximate fair value because of the short maturity of these financial
instruments.  Debt that bears variable  interest rates indexed to prime or LIBOR
also  approximates  fair value as it reprices when market interest rates change.
The  estimated  fair  value  of the  Company's  long-term,  fixed-rate  mortgage
receivables was $14.1 million and $4.1 million versus carrying  amounts of $14.2
million and $4.3  million at April 30, 2006 and April 30,  2005.  The  estimated
fair value of the Company's long-term, fixed-rate notes payable was $3.4 million
versus a carrying amount of $3.6 million as of April 30, 2006, and both the fair
value and carrying amount was $4.5 million as of April 30, 2005.

(17)     INFORMATION ABOUT THE COMPANY'S OPERATIONS IN DIFFERENT
         -------------------------------------------------------
         INDUSTRY SEGMENTS:
         ------------------

The Company has identified  three segments in which it currently  operates under
the  definition  established by SFAS No. 131. Real Estate  operations  primarily
include land sales  activities,  which  involve the  obtaining of approvals  and
development of large tracts of land for sales to homebuilders,  commercial users
and others, as well as investments in commercial and investment properties.  The
Company's  Media  Services  subsidiary has two  identified  segments,  Newsstand
Distribution Services and Fulfillment Services.  Fulfillment Services operations
involve  the  performance  of  subscription  and product  fulfillment  and other
related  activities  on behalf of  various  publishers  and  other  clients, and
Newsstand  Distribution Services operations involve the national and, to a small
degree,  international  distribution  and sale of  periodicals  to  wholesalers.
Corporate  revenues and expenses not  identifiable  with a specific  segment are
grouped  together  in this  presentation.  Certain  common  expenses  as well as
identifiable   assets  are  allocated   among   industry   segments  based  upon
management's estimate of each segment's absorption.






                                       40
<PAGE>


Summarized  data  relative  to the  industry  segments  in which the Company has
operations is as follows (amounts in thousands):
<TABLE>
<S>                                    <C>                <C>              <C>                <C>              <C>

                                                                            Newsstand
                                          Real Estate      Fulfillment     Distribution
                                          Operations       Services          Services         Corporate        Consolidated
                                        -------------     ------------     ------------      -----------      -------------
Year ended April 30, 2006:
   Revenues                             $   59,169        $   75,332       $   13,131         $     664        $   148,296
   Expenses                                 30,906            70,352           11,290             2,677            115,225
   Management fee (income)                     995               851              144            (1,990)                 -
   Interest expense (income), net                -               452             (108)                -                344
                                        -------------     ------------     ------------      -----------      -------------
   Pretax income (loss) contribution
     from continuing operations         $   27,268        $    3,677       $    1,805         $     (23)       $    32,727
                                        =============     ============     ============      ===========      =============

   Depreciation and amortization        $      235        $    4,552       $      749         $      32        $     5,568
   Identifiable assets                  $   80,456        $   43,061       $   28,738         $  31,595        $   183,850
   Intangible assets                    $        -        $    1,298       $    3,893         $       -        $     5,191
   Capital expenditures                 $      252        $    3,500       $      140         $       4        $     3,896

- ---------------------------------------------------------------------------------------------------------------------------
Year ended April 30, 2005:
   Revenues                             $   37,385        $   83,896       $   13,017         $     208        $   134,506
   Expenses                                 20,995            76,228           11,603             2,106            110,932
   Management fee (income)                     900               784              116            (1,800)                 -
   Interest expense, net                         5               555               47                53                660
                                        -------------     ------------     ------------      -----------      -------------
   Pretax income (loss) contribution
     from continuing operations         $   15,485        $    6,329       $    1,251         $    (151)       $    22,914
                                        =============     ============     ============      ===========      =============
   Depreciation and amortization        $      188        $    4,403       $      575         $     177        $     5,343
   Identifiable assets                  $   75,571        $   41,918       $   38,681         $  32,948        $   189,118
   Intangible assets                    $        -        $    1,298       $    3,893         $       -        $     5,191
   Capital expenditures                 $    1,913        $    3,018       $        -         $      14        $     4,945

- ---------------------------------------------------------------------------------------------------------------------------
Year ended April 30, 2004:
   Revenues                             $   29,415        $   87,629       $   12,162         $      85        $   129,291
   Expenses                                 17,022            80,786           11,036             1,568            110,412
   Management fee (income)                     770               592              141            (1,503)                 -
   Interest expense, net                       213               615               30                86                944
                                        -------------     ------------     ------------      -----------      -------------
   Pretax income (loss) contribution
     from continuing operations         $   11,410        $    5,636       $      955         $     (66)       $    17,935
                                        =============     ============     ============      ===========      =============
   Depreciation and amortization        $      225        $    4,087       $      459         $     244        $     5,015
   Identifiable assets                  $   76,934        $   38,983       $   33,917         $  16,140        $   165,974
   Intangible assets                    $        -        $    1,298       $    3,893         $       -        $     5,191
   Capital expenditures                 $      266        $    3,069       $      218         $     115        $     3,668

- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       41
<PAGE>





(18)  SELECTED QUARTERLY FINANCIAL DATA  (Unaudited):
      -----------------------------------------------
<TABLE>
<S>                                      <C>             <C>              <C>              <C>

                                             (In thousands of dollars, except per share amounts)
                                                                  Quarter Ended
                                         -----------------------------------------------------------------

Year ended April 30, 2005:                  July 31,       October 31,      January 31,      April 30,
                                              2005            2005            2006             2006
                                         --------------  ---------------  --------------  --------------
Revenues                                  $    30,014     $     34,847     $    35,589     $    47,846

Gross Profit                                    6,437           10,698           9,671          19,688

Income from continuing
  operations, net of taxes                      1,802            5,062           5,241          10,389
                                         --------------  ---------------  --------------  --------------
Income (loss) from operations of
  discontinued business, net of
  taxes                                         3,562               (6)              -               -
                                         --------------  ---------------  --------------  --------------
Net income                                $     5,364     $      5,056     $      5,241    $    10,389
                                         ==============  ===============  ==============  ==============
Earnings per share - Basic
  and Diluted (a):
    Continuing operations                 $      0.27     $       0.76     $       0.79    $      1.56
    Discontinued operations                      0.54                -                -              -
                                         --------------  ---------------  --------------  --------------
  Total                                   $      0.81     $       0.76     $       0.79    $      1.56
                                         ==============  ===============  ==============  ==============

(a)  The sum of the quarters does not equal the full year earnings per share due
     to rounding.

Year ended April 30, 2005:                  July 31,       October 31,      January 31,      April 30,
                                              2004             2004            2005             2005
                                         --------------  ---------------  --------------  --------------
Revenues                                  $    33,638     $     33,230     $     31,486    $     36,152

Gross Profit                                    9,967            9,465            7,120          11,072

Income from continuing
  operations, net of taxes                      3,941            4,370            2,511           4,766
                                         --------------  ---------------  --------------  --------------
Income (loss) from operations of
  discontinued business, net of
  taxes                                            85             (175)              50             (23)
                                         --------------  ---------------  --------------  --------------
Net income                                $     4,026     $      4,195     $      2,561    $      4,743
                                         ==============  ===============  ==============  ==============
Earnings (loss) per share - Basic
  and Diluted:
    Continuing operations                 $      0.60     $       0.66     $       0.38    $       0.72
    Discontinued operations                      0.01            (0.03)            0.01               -
                                         --------------  ---------------  --------------  --------------
Total                                     $      0.61     $       0.63     $       0.39    $       0.72
                                         ==============  ===============  ==============  ==============

</TABLE>







                                       42
<PAGE>


Item 9.             Changes in and Disagreements with Accountants on Accounting
- -------             -----------------------------------------------------------
                    and Financial Disclosure
                    ------------------------
None

Item 9A.            Controls and Procedures
- --------            -----------------------

Evaluation of Disclosure Controls and Procedures

The  Company's  management,  with  the  participation  of  the  Company's  chief
financial  officer  and  the  other  executive  officers  whose   certifications
accompany this annual report,  has evaluated the  effectiveness of the Company's
disclosure  controls  and  procedures  (as defined in Rule  13a-15(e)  under the
Securities  Exchange  Act of 1934) as of the end of the  period  covered by this
report.  As a result of such  evaluation,  the chief financial  officer and such
other  executive  officers  have  concluded  that such  disclosure  controls and
procedures are effective to provide  reasonable  assurance that the  information
required to be disclosed in the reports the Company  files or submits  under the
Securities  Exchange  Act of 1934 is (i)  recorded,  processed,  summarized  and
reported  within the time  periods  specified  in the  Securities  and  Exchange
Commission's   rules  and  forms,  and  (ii)  accumulated  and  communicated  to
management,  including the Company's principal executive and principal financial
officers or persons performing such functions,  as appropriate,  to allow timely
decisions regarding  disclosure.  The Company believes that a control system, no
matter how well designed and operated,  cannot provide  absolute  assurance that
the  objectives of the control system are met, and no evaluation of controls can
provide  absolute  assurance that all control issues and instances of fraud,  if
any, within a company have been detected.

Changes in Internal Control over Financial Reporting

No change in the Company's system of internal  control over financial  reporting
occurred during the most recent fiscal quarter that has materially affected,  or
is  reasonably  likely to materially  affect,  internal  control over  financial
reporting.


Item 9B.            Other Information
- --------            -----------------

None


























                                       43
<PAGE>


                                    PART III
                                    --------

Item 10.            Directors and Executive Officers of the Registrant
- --------            --------------------------------------------------

The information set forth under the headings "Election of Directors", "The Board
of  Directors  and its  Committees"  and  "Section  16(a)  Beneficial  Ownership
Reporting  Compliance"  in the  Company's  Proxy  Statement  for its 2006 Annual
Meeting of Shareholders to be filed with the Securities and Exchange  Commission
(the "2006 Proxy Statement") is incorporated  herein by reference.  In addition,
information  concerning the Company's  executive  officers is included in Part I
above under the caption "Executive Officers of the Registrant".

Item 11.            Executive Compensation
- --------            ----------------------

The information set forth under the headings  "Executive  Compensation" and "The
Board  of  Directors  and  its  Committees"  in  the  2006  Proxy  Statement  is
incorporated herein by reference.

Item 12.           Security Ownership of Certain Beneficial Owners and
- --------           ---------------------------------------------------
                   Management and Related Stockholder Matters
                   ------------------------------------------

The  information  set forth under the heading "Common Stock Ownership of Certain
Beneficial Owners and Management" and under the subheading "Equity  Compensation
Plan  Information"  in the  2006  Proxy  Statement  is  incorporated  herein  by
reference.

Item 13.           Certain Relationships and Related Transactions
- --------           ----------------------------------------------

The information set forth under the heading  "Compensation  Committee Interlocks
and Insider Participation" in the 2006 Proxy Statement is incorporated herein by
reference.

Item 14.           Principal Accountant Fees and Services
- --------           --------------------------------------

The information set forth under the subheadings  "Audit Fees" and  "Pre-Approval
Policies and Procedures" in the 2006 Proxy  Statement is incorporated  herein by
reference.









                                       44
<PAGE>



                                     PART IV
                                     -------

Item 15.          Exhibits and Financial Statement Schedules
- --------          ------------------------------------------

(a)               1. Financial  Statements. The following consolidated financial
                     ----------------------
statements and supplementary financial information are filed as part of this
report:

                  AMREP Corporation and Subsidiaries:

                    o    Report of Independent Registered Public Accounting Firm
                         dated June 13, 2006 - McGladrey & Pullen, LLP

                    o    Consolidated Balance Sheets - April 30, 2006 and 2005

                    o    Consolidated  Statements  of Income for the Three Years
                         Ended April 30, 2006

                    o    Consolidated Statements of Shareholders' Equity for the
                         Three Years Ended April 30, 2006

                    o    Consolidated  Statements  of Cash  Flows  for the Three
                         Years Ended April 30, 2006

                    o    Notes to Consolidated Financial Statements

                  2.  Financial Statement Schedules.  The following financial
                      -----------------------------
statement schedule is filed as part of this report:

                  AMREP Corporation and Subsidiaries:

                    o    Schedule II - Valuation and Qualifying Accounts

                  Financial  statement  schedules  not included in this annual
report on Form 10-K have been omitted  because they are not applicable or the
required information is shown in the financial statements or notes thereto.

                  3.  Exhibits.
                      ---------

                  The exhibits filed in this report are listed in the Exhibit
Index.

                  The  Registrant  agrees,  upon  request  of the  Securities
and  Exchange  Commission,  to file as an  exhibit  each instrument defining the
rights of holders of long-term  debt of the Registrant and its  consolidated
subsidiaries  which has not been filed for the  reason  that the total amount of
securities authorized thereunder does not  exceed 10% of the total assets of the
Registrant and its subsidiaries on a consolidated basis.

(b)                   Exhibits.  See (a)3 above.
                      --------

(c)                  Financial Statement Schedules.  See (a)2 above.
                     -----------------------------



                                       45
<PAGE>



                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  Registrant  has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                                    AMREP CORPORATION
                                                     (Registrant)

Dated:  July 27, 2006                               By /s/ Peter M. Pizza
                                                       ------------------------
                                                       Peter M. Pizza
                                                       Vice President and Chief
                                                       Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of  Registrant  and in
the capacities and on the dates indicated.


/s/ Peter M. Pizza                       /s/ Nicholas G. Karabots
- -------------------------                --------------------------
  Peter M. Pizza                          Nicholas G. Karabots
  Vice President and Chief Financial      Director
  Officer Principal Financial             Dated:  July 27, 2006
  Officer and Principal
  Accounting Officer*
  Dated:  July 27, 2006

/s/ Edward B. Cloues  II                 /s/ Albert V.  Russo
- ------------------------                 --------------------------
  Edward B. Cloues II                     Albert V. Russo
  Director                                Director
  Dated:  July 27, 2006                   Dated:  July 27, 2006

/s/ Lonnie A. Coombs                     /s/ Samuel N. Seidman
- ------------------------                 --------------------------
  Lonnie A. Coombs                        Samuel N. Seidman
  Director                                Director
  Dated:  July 27, 2006                   Dated:  July 27, 2006

/s/ Elmer F. Hansen, Jr                  /s/ James Wall
- ------------------------                 --------------------------
  Elmer F. Hansen, Jr.                    James Wall
  Director                                Director*
  Dated:  July 27, 2006                   Dated:  July 27, 2006

                                         /s/ Michael P. Duloc
                                         --------------------------
                                          Michael P. Duloc
                                          President, Kable Media Services, Inc.*
                                          Dated:  July 27, 2006


- -----------------
*The  Registrant  is a  holding  company  which  does  substantially  all of its
business through two wholly-owned  subsidiaries (and their subsidiaries).  Those
wholly-owned  subsidiaries  are AMREP  Southwest  Inc.  ("ASW")  and Kable Media
Services, Inc. ("Kable").  James Wall is the principal executive officer of ASW,
and Michael P. Duloc is the principal executive officer of Kable. The Registrant
has no chief  executive  officer.  Its  executive  officers  include James Wall,
Senior Vice  President and Peter M. Pizza,  Vice  President and Chief  Financial
Officer,  and Michael P. Duloc, who may be deemed an executive officer by reason
of his position with Kable.






                                       46
<PAGE>
<TABLE>
<CAPTION>


                       AMREP CORPORATION AND SUBSIDIARIES
                       ----------------------------------
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                 -----------------------------------------------
                                   (Thousands)
<S>                                         <C>              <C>              <C>               <C>              <C>
                                                                       Additions
                                                                Charges         Charged
                                              Balance at      (Credits) to    (Credited) to
                                               Beginning        Costs and          Other                         Balance at End
            Description                        of Period        Expenses         Accounts         Deductions       of Period
            -----------                     ---------------  --------------- ----------------   --------------   --------------



FOR THE YEAR ENDED
 APRIL 30, 2006:
     Allowance for doubtful accounts
       (included in receivables - real
       estate operations on the
       consolidated balance sheet)            $        96      $        -      $          -       $         -      $       96
                                            ---------------  --------------- ----------------   --------------   --------------


     Allowance for estimated returns and
       doubtful accounts (included in
       receivables - magazine circulation
       operations on the consolidated
       balance sheet)
                                              $    59,165      $   (3,483)     $          -       $       76       $   55,606
                                            ---------------  --------------- ----------------   --------------   --------------
 FOR THE YEAR ENDED
 APRIL 30, 2005:
     Allowance for doubtful accounts
       (included in receivables - real
       estate operations on the
       consolidated balance sheet)            $       192      $        -      $          -       $       96       $       96
                                            ---------------  --------------- ----------------   --------------   --------------

     Allowance for estimated returns and
       doubtful accounts (included in
       receivables - magazine circulation
       operations on the consolidated
       balance sheet)                         $    55,620      $    3,825      $          -       $      280       $   59,165
                                            ---------------  --------------- ----------------   --------------   --------------

 FOR THE YEAR ENDED
 APRIL 30, 2004:
     Allowance for doubtful accounts
       (included in receivables - real
       estate operations on the
       consolidated balance sheet)            $       280      $        7      $          -       $       95       $      192
                                             ---------------  --------------- ----------------   --------------   --------------

     Allowance for estimated returns and
       doubtful accounts (included in
       receivables - magazine circulation
       operations on the consolidated
       balance sheet)
                                              $    65,811      $  (10,015)     $          -       $      176       $   55,620
                                            ---------------  --------------- ----------------   --------------   --------------
</TABLE>

     Note: Charges (credits) recorded in magazine circulation operations include
     a reserve for the estimate of magazine returns from wholesalers,  which are
     substantially  offset by offsetting  credits related to the return of these
     magazines to publishers.










                                       47
<PAGE>

                                  EXHIBIT INDEX
                                  -------------

3 (a) (i) Articles of  Incorporation,  as amended - Incorporated by reference to
          Exhibit  (3)(a)(i) to Registrant's  Annual Report on Form 10-K for the
          fiscal year ended April 30, 1998.

3 (a)(ii) Certificate  of  Merger  -   Incorporated   by  reference  to  Exhibit
          (3)(a)(ii) to  Registrant's  Annual Report on Form 10-K for the fiscal
          year ended April 30, 1998.

3 (b)     By-Laws as  restated  July 13, 2004 -  Incorporated  by  reference  to
          Exhibit  3 (b) to  Registrant's  Annual  Report  on Form  10-K for the
          fiscal year ended April 30, 2004.

4 (a)     Amended and Restated Loan and Security Agreement dated as of April 28,
          2005 among Kable News  Company,  Inc.,  Kable  Distribution  Services,
          Inc., Kable News Export,  Ltd., Kable News International,  Inc., Kable
          Fulfillment  Services,  Inc. and Kable  Fulfillment  Services of Ohio,
          Inc.  and  LaSalle  Bank  National  Association.   -  Incorporated  by
          reference to Exhibit 10.1 to  Registrant's  Current Report on Form 8-K
          filed May 3, 2005.

4 (b)     First  Amendment  dated as of April 27, 2006 to Amended  and  Restated
          Loan and  Security  Agreement  dated as of April 28,  2005 among Kable
          News Company,  Inc.,  Kable  Distribution  Services,  Inc., Kable News
          Export,  Ltd..  Kable  News  International,  Inc.,  Kable  Fulfillment
          Services,  Inc.,  and Kable  Fulfillment  Services of Ohio,  Inc.  and
          LaSalle Bank  National  Association.  -  Incorporated  by reference to
          Exhibit 10.1 to Registrant's  Current Report on Form 8-K filed May 24,
          2006.

4 (c)     Credit  Agreement  dated as of April 1, 2005 between  AMREP  Southwest
          Inc. and Wells Fargo Bank,  National  Association  -  Incorporated  by
          reference to Exhibit 10.1 to  Registrant's  Current Report on Form 8-K
          filed May 11, 2005.

4 (d)     Revolving Line of Credit Note dated April 1, 2005 from AMREP Southwest
          Inc. to Wells Fargo  Bank,  National  Association  -  Incorporated  by
          reference to Exhibit 10.2 to  Registrant's  Current Report on Form 8-K
          filed May 11, 2005.

10 (a)    Non-Employee  Directors  Option  Plan,  as amended -  Incorporated  by
          reference to Exhibit 10 (i) to Registrant's Annual Report on Form 10-K
          for the fiscal year ended April 30, 1997.*

10 (b)    2002 Non-Employee Directors' Stock Plan - Incorporated by reference to
          Exhibit  10.1 to  Registrant's  Quarterly  Report on Form 10-Q for the
          quarterly period ended January 31, 2003.*

10 (c)    Offer letter dated June 2, 2005 from  Registrant  to Joseph S. Moran -
          Incorporated  by  reference to Exhibit  10.1 to  Registrant's  Current
          Report on Form 8-K filed June 8, 2005.*

10 (d)    Amended and Restated Distribution Agreement dated as of April 30, 2006
          between Kappa Publishing Group, Inc. and Kable Distribution  Services,
          Inc.- Filed herewith. **

21        Subsidiaries  of Registrant - Incorporated  by reference to Exhibit 21
          to  Registrant's  Annual Report on Form 10-K for the fiscal year ended
          April 30, 2005 filed July 28, 2005.

23        Consent of McGladrey & Pullen, LLP - Filed herewith.

31.1      Certification  required  by Rule  13a - 14 (a)  under  the  Securities
          Exchange Act of 1934.

31.2      Certification  required  by Rule  13a - 14 (a)  under  the  Securities
          Exchange Act of 1934.

31.3      Certification  required  by Rule  13a - 14 (a)  under  the  Securities
          Exchange Act of 1934.

32        Certification  required  by Rule  13a - 14 (b)  under  the  Securities
          Exchange Act of 1934.

- ------------------------
* Management  contract or compensatory plan or arrangement in which directors or
officers participate.

**  Portions  of this  exhibit  have been  omitted  pursuant  to a  request  for
confidential  treatment  under Rule 24b-2 under the  Securities  Exchange Act of
1934.


                                       48
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>exh10d.txt
<TEXT>
                                                                   EXHIBIT 10(d)

             CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO RULE 24b-2
     Certain portions, indicated by [***] of this exhibit have been omitted
   pursuant to a request for confidential treatment under Rule 24b-2 under the
      Securities Exchange Act of 1934. The omitted portions have been filed
             separately with the Securities and Exchange Commission.

                   AMENDED AND RESTATED DISTRIBUTION AGREEMENT

     THIS AGREEMENT is made and entered into at Fort Washington, Pennsylvania as
of the 30th day of April,  2006 by and between KAPPA PUBLISHING  GROUP,  INC., a
Delaware  corporation  and its  Affiliates,  whose  place of business is at 6198
Butler Pike, Blue Bell,  Pennsylvania 19422 (collectively  hereafter referred to
as PUBLISHER) and KABLE  DISTRIBUTION  SERVICES,  INC., a Delaware  corporation,
whose place of business is at 505 Park  Avenue,  New York,  NY 10022  (hereafter
referred to as DISTRIBUTOR).

                               W I T N E S S E T H
                               - - - - - - - - - -

     WHEREAS,  PUBLISHER is a party to a Distribution  Agreement dated August 4,
1993, as amended (as so amended,  the "Original  Distribution  Agreement") which
provides for the distribution of PUBLISHER's titles; and

     WHEREAS, by assignment,  DISTRIBUTOR has succeeded to the rights and duties
of the distributor under the Original Distribution Agreement; and

     WHEREAS,  PUBLISHER and DISTRIBUTOR wish to amend certain provisions of the
Original Distribution Agreement; and

     WHEREAS,  PUBLISHER  and  DISTRIBUTOR  have agreed to amend and restate the
Original Distribution  Agreement in its entirety to reflect the changes required
by the parties; and

     WHEREAS,  PUBLISHER  and  DISTRIBUTOR  agree  that the  provisions  of this
Agreement  shall apply solely to  Publications  published  by PUBLISHER  and its
Affiliates.

     NOW THEREFORE,  for and in  consideration  of the mutual  covenants  herein
contained,  and other good and valuable consideration,  the parties hereby agree
as follows:

1. DEFINITIONS
   -----------

     (a)  "Affiliate"  of any Person shall mean any other Person  controlling or
controlled  by or under  common  control  with such  specified  Person.  For the
purposes of this definition,  "control," when used with respect to any specified
Person,  shall mean the power to direct the management,  policies or investments
of such Person, directly or indirectly,  whether through the ownership of voting
securities,   by  contract  or  otherwise,   and  the  terms  "controlling"  and
"controlled"  shall have meanings  correlative to the  foregoing.  Affiliates of
PUBLISHER shall include Kappa Entertainment  Group, Inc. and Kappa Puzzle Group,
Inc.


<PAGE>

     (b)  "Average  Net  Sale  Percentage"  with  respect  to  each  issue  of a
Publication  shall mean the  quotient of the Net  Billings  with  respect to the
Measurement  Issues (determined by reference to the Settlement Payment Publisher
Statements,  as defined in Paragraph 15, or comparable  statements,  as the case
may be, as referred to in the definition of Measurement  Issues)  divided by the
Publisher's  Gross Billings with respect to such Measurement  Issues  (similarly
determined).  When the context  requires,  Average Net Sale Percentage  shall be
calculated  separately for one or more Distributor's  Sales Outlets,  or for all
Distributor's Sales Outlets combined.

     (c) "Change of Control" with respect to any Person shall mean

          (i) That any "person" or "group"  within the meaning of Sections 13(d)
     and  14(d)(2) of the  Exchange  Act (x) becomes the  "beneficial  owner" as
     defined in Rule 13d-3  promulgated under the Exchange Act of more than 50%,
     of the then outstanding  voting  securities of such Person, or (y) acquires
     by proxy,  contract  or  otherwise  the right to vote for the  election  of
     directors  (or  similar  such  managing  individuals),  for any  merger  or
     consolidation of such Person, or for any other matter or question more than
     50% of the then outstanding voting securities of such Person; or

          (ii) That during any period of  twenty-four  (24)  consecutive  months
     (not  including  any period prior to the date of this  Agreement),  Present
     Directors  and/or  New  Directors  cease  for any  reason to  constitute  a
     majority  of the Board of  Directors  (or similar  governing  body) of such
     Person. For purposes of the preceding  sentence,  "Present Directors" shall
     mean individuals who at the beginning of such consecutive twenty-four month
     period were members of the Board of Directors (or similar  governing  body)
     of such Person and "New  Directors"  shall mean any director whose election
     by the Board of  Directors  (or similar  governing  body) of such Person or
     whose nomination for election by such Person's stockholders was approved by
     a vote of a least two-thirds of the directors then still in office who were
     Present Directors or New Directors.

     (d)  "Completion  of Shipping"  with respect to each issue of a Publication
shall mean the date the  PUBLISHER's  printer  completed  shipping all copies of
such issue to  Distributor's  Sales  Outlets in  accordance  with  DISTRIBUTOR's
shipping instructions as stated on the Printer's Completion Notice.

     (e) "Cover  Price" with respect to each issue of a  Publication  shall mean
the suggested  retail selling price of such issue specified on the cover of each
copy thereof.

     (f) "Distributor's Estimated Final Net Billings" with respect to each issue
of a  Publication  shall mean the product of the Average Net Sale  Percentage of
such  Publication  (using the  Completion of Shipping as the  calculation  date)
multiplied by the Publisher's  Billing Price of such issue and multiplied by the
number  of  copies  of such  issue  shipped  in  accordance  with the  Printer's
Completion  Notice;   provided,   however,   that  Returns  of  issues  of  such
Publication,  the On-Sale  Dates of which are prior to those of the  Measurement
Issues,  which  have  not  previously  been  accounted  for may be  deducted  in
computing  Distributor's Estimated Final Net Billings. In the event there are no


                                       2
<PAGE>

Measurement  Issues of such  Publication  as of such date,  the Average Net Sale
Percentage  for  purposes  of  determining  Distributor's  Estimated  Final  Net
Billings shall mean the Average Net Sale Percentage of other  Publications which
have editorial  content similar to that of the Publication  (e.g., all Word-Find
Publications, all Crossword Publications, or all Wrestling Publications), and if
there are no such similar Publications, Average Net Sale Percentage for purposes
of determining Distributor's Estimated Final Net Billings shall mean the Average
Net Sale Percentage of all Publications  with the same publication  frequency as
that of such Publication as of such Completion of Shipping,  and if there are no
Publications  with the same publication  frequency as that of such  Publication,
Average Net Sale Percentage for purposes of determining  Distributor's Estimated
Final  Net  Billings  shall  mean  the  Average  Net  Sale   Percentage  of  all
Publications.  When the  context  requires,  Distributor's  Estimated  Final Net
Billings shall be calculated  separately for Foreign Distributor's Sales Outlets
as a group and for non-Foreign Distributor's Sales Outlets as a group.

     (g) "Distributor's Sales Outlets" shall mean customers of DISTRIBUTOR.

     (h) "Effective Date" shall mean January 1, 2006

     (i)  "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
amended.

     (j) "Exchange  Rate" shall mean the cash (as  contrasted  with the forward)
rate at which a currency  other  than U.S.  Dollars  is  convertible  into U. S.
Dollars,  as published  in the Exchange  Rates table (or  comparable  table,  if
renamed)  of the  Wall  Street  Journal,  or if such  information  is no  longer
published  in such  newspaper,  as published  by Telerate  Systems,  and if such
information  is no longer  published  by  Telerate  Systems,  by such  reputable
financial  information  publishing  company as may be mutually  agreeable to the
parties.

     (k)  "Measurement  Issues"  with  respect  to  a  calculation  date  and  a
Publication  shall mean (i) the last three (3) issues of such  similarly  priced
Publication if such Publication is published  monthly or more  frequently,  (ii)
the last two (2) issues of such similarly priced Publication if such Publication
is published at least quarter  annually but not as  frequently  as monthly,  and
(iii) the last issue of such similarly priced Publication if such Publication is
published less frequently than quarter annually, in each such case as to which a
Settlement  Payment  Publisher  Statement  (as  defined  in  Paragraph  15),  or
comparable  such  statement  if rendered by another  distributor  or pursuant to
another distribution agreement,  has been issued prior to such calculation date.
In any case where Settlement  Payment  Publisher  Statements (or such comparable
statements as the case may be) for fewer than the indicated number of issues are
available,  the  Measurement  Issues  shall  refer to such  fewer  issues as are
available.

     (l) "Net Billings"  with respect to each issue of a Publication  shall mean
Publisher's  Gross Billings with respect to such issue, less Return Credits with
respect to such issue.

     (m) "Notice" shall mean a communication  between the parties which conforms
to the requirements of Paragraph 25.

     (n) "Off-Sale Date" with respect to each issue of a Publication  shall mean
the On- Sale  Date of such  Publication's  next  issue,  or such  other  date as
designated  by  PUBLISHER  that all  copies of such  issue are  scheduled  to be

                                       3
<PAGE>

removed from retail outlets for sale to the general public.

     (o) "On-Sale  Date" with respect to each issue of a Publication  shall mean
the date  designated  by PUBLISHER  that such issue is scheduled to be placed in
retail outlets for sale to the general public.

     (p)  "Outside  Deadline  for  Returns"  with  respect  to each  issue  of a
Publication  shall mean [***]  days  after the  Off-Sale  Date of such issue for
non-Foreign  Distributor's Sales Outlets, and [***] days after the Off-Sale Date
of such issue for Foreign Distributor Sales Outlets.

     (q) "Person" shall mean an individual,  a  corporation,  a partnership,  an
association,  a joint stock company,  a joint venture,  an estate,  a trust,  an
unincorporated   organization  or  a  government,   governmental   unit  or  any
subdivision thereof or any other entity.

     (r)  "Printer's  Completion  Notice"  with  respect  to  each  issue  of  a
Publication  shall mean a notice  delivered  to  DISTRIBUTOR  and executed by an
appropriate representative of the printer of such issue, which shall specify the
number  of  copies  of such  issue  shipped  in  accordance  with  DISTRIBUTOR'S
instructions, and the date of completion of such shipping.

     (s) "Publisher's  Billing Price" with respect to each copy of each issue of
a  Publication  shall be in an  amount  equal  to  [***]  of Cover  Price of all
Publications.

     (t)  "Publisher's   Gross  Billings"  with  respect  to  each  issue  of  a
Publication shall mean the product of Publisher's  Billing Price with respect to
such  issue  multiplied  by  the  number  of  copies  distributed  hereunder  in
accordance with the Printer's Completion Notice with respect to such issue.

     (u)  "Publication(s)"  shall  mean the  title(s)  listed  on  Schedule  "A"
attached hereto including any "one-shots,"  annuals or titles derived therefrom,
as  amended  from time to time to include  any  additional  titles  subsequently
covered by the terms  hereof as provided  herein or as provided by  agreement of
the parties.

     (v) "RDA"  shall  mean a retail  display  allowance  offered  by  PUBLISHER
pursuant  to  a  program  to  retailers  engaged  in  the  sale  of  PUBLISHER's
Publication(s)  for  (i)  each  copy  sold  of each  Publication  and/or  (ii) a
specified position in a retailer sales fixture.

     (w) "Returns"  with respect to each issue of a  Publication  shall mean any
and all copies of such issue returned for credit by Distributor's  Sales Outlets
pursuant  to  Paragraph  9 hereof and for which  DISTRIBUTOR  has issued  such a
credit.

     (x) "Return Credit" with respect to each issue of a Publication  shall mean
the product of Publisher's  Billing Price with respect to such issue  multiplied
by the number of Returns of such issue.

     (y)  "Territory"  shall  mean the  United  States  of  America  and all its
possessions,  all Army and Fleet Post Office  designations,  and the Dominion of
Canada, and the rest of the world.

                                       4
<PAGE>


2. GRANT OF RIGHTS
   ---------------

     (a) Except as otherwise  provided in  subparagraph  (b) of this Paragraph 2
PUBLISHER  hereby  gives and  grants  to the  DISTRIBUTOR,  effective  as of the
Effective  Date and  during  the term  hereof  the sole and  exclusive  right to
purchase from PUBLISHER and to resell and  distribute  throughout the Territory,
the  Publication(s).  All purchases shall be subject to  DISTRIBUTOR's  right to
receive Return Credits for Returns as set forth in Paragraph 9 hereof.

     (b)  Notwithstanding the provisions of subparagraph (a) of this Paragraph 2
to the contrary, PUBLISHER reserves the right to

          (i) Sell copies of the  Publication(s)  to subscribers at subscription
     prices;

          (ii)  Distribute,  give,  or deliver to  individuals  without  cost or
     compensation  copies of any of the  Publication(s) as part of a promotional
     campaign for such Publication(s); and

          (iii) Sell copies of the  Publication(s),  directly or indirectly,  to
     chains of retailers  not serviced by  DISTRIBUTOR  or  Distributor's  Sales
     Outlets on the Effective Date; provided,  however,  that if during the term
     hereof,  such service is commenced to substantially all of the retailers in
     any such  chain by  DISTRIBUTOR  or  Distributor's  Sales  Outlets,  and if
     DISTRIBUTOR  agrees,  after  deducting  any RDA  payment  obligations  with
     respect to each issue of each Publication sold at such retailers,  to remit
     to PUBLISHER with respect thereto the same amount of money as PUBLISHER had
     been receiving with respect to such sales prior  thereto,  PUBLISHER  shall
     commence selling  exclusively to DISTRIBUTOR for resale to the retailers in
     such chain or to the  Distributor's  Sales  Outlets for ultimate  resale to
     such  retailers,  and pursuant to the terms hereof  (except as such payment
     amount by DISTRIBUTOR to PUBLISHER may be inconsistent  with that set forth
     on Schedule  "A"  attached  hereto as a result of the terms of this section
     (iii)) upon  expiration of any then existing  distribution  agreement  with
     respect to such chain(s) of retailers.

3. TERM AND EVENTS OF DEFAULT
   --------------------------

     (a) Except as otherwise  provided in subparagraphs  (b), (d) or (f) of this
Paragraph 3, the term of this Agreement shall be for a period  commencing on the
Effective  Date, and ending on June 30, 2008. The rights and  obligations of the
parties under this  Agreement  shall include and be deemed to include all issues
of all  Publication(s),  the respective  On-Sale Date(s) of which occur prior to
the termination hereof ("Covered Issues").  Any and all of the respective rights
and  obligations of the PUBLISHER and  DISTRIBUTOR  under this  Agreement  shall
survive its termination for the purposes of distributing  Covered Issues, and of
handling and crediting Returns and making payments, adjustments and credits with
respect to Covered  Issues.  Termination of this Agreement  shall not affect any
right of either  party to  receive  any money owed by the other  hereunder,  the
amount of which shall be  calculated  in the manner  which would have  otherwise
been required hereby, absent such termination.

                                       5
<PAGE>

     (b)  Notwithstanding any other provision of this Agreement to the contrary,
either party may terminate  this  Agreement upon thirty (30) days' Notice to the
other upon the occurrence or existence of an Event of Default by the other party
of the type referred to in subparagraph  (c)(i), (ii) or (vii) of this Paragraph
3; or upon three (3) days' Notice to the other upon the  occurrence or existence
of an  Event  of  Default  by  the  other  party  of  the  type  referred  to in
subparagraph  (c)(iii),  (iv),  (v),  or (vi) of this  Paragraph  3, or upon the
failure of a party to pay an arbitration award within the time period prescribed
in subparagraph 28(c).

     (c) For  purposes of this  Agreement,  each of the  following  events shall
constitute  an Event of Default  by the party as to which  such event  refers or
pertains:

          (i) any representation or warranty made by such party herein or in any
     written  statement  or  written  representation  shall  prove to have  been
     incorrect when made in any respect material to this Agreement; or

          (ii) Such party  shall fail to perform  in any  material  respect  any
     term,  covenant or agreement  contained in this Agreement (other than those
     set forth in Paragraph 15, those set forth in subparagraph 24(b), and those
     subject  to a  pending  dispute  being  resolved  pursuant  to the terms of
     Paragraph  28) on its part to be  performed  or  observed if such a failure
     shall remain  unremedied for [***] days after Notice thereof from the other
     party,  unless such failure cannot reasonably be expected to be remedied in
     such [***] day  period,  in which case such party  shall fail  within  such
     [***] day period to  commence  such remedy and or proceed  diligently  with
     respect thereto;  provided,  however,  that in no event shall any such cure
     period extend beyond [***] days after such Notice; or

          (iii) Such party  shall  generally  be unable to pay its debts as such
     debts become due, or shall admit in writing its  inability to pay its debts
     generally, or shall make a general assignment for the benefit of creditors;
     or a  proceeding  shall be  instituted  by or  against a party  seeking  to
     adjudicate it a bankrupt or insolvent, or seeking liquidation,  winding up,
     reorganization, arrangement, adjustment, protection, relief, or composition
     of it or its debts under any law  relating  to  bankruptcy,  insolvency  or
     reorganization  or relief of debtors,  or seeking the entry of an order for
     relief or the appointment of a receiver, trustee, or other similar official
     for it or for any substantial  part of its property if any such involuntary
     proceeding  is not  dismissed  within sixty (60) days;  or such party shall
     take any  corporate  action to authorize any of the actions set forth above
     in this subsection (iii); or

          (iv)  any  judgment  creditor  shall  have  commenced  an  enforcement
     proceeding against such party pursuant to a judgment or order of a court of
     competent  jurisdiction  after lawful service for the payment of money (not
     fully covered by insurance) in excess of Two Hundred Fifty Thousand Dollars
     ($250,000) which enforcement proceeding was not stayed prior to the seizure
     of any such party's  assets,  which  seizure was not reversed by the timely
     filing of an appeal thereof. For purposes of this section (iv) the creation
     of a lien by entry of such a judgment or order shall not itself  constitute
     such a seizure.

                                       6
<PAGE>

     For  purposes  of  this  Agreement,  each  of the  following  events  shall
constitute an Event of Default by DISTRIBUTOR:

          (v) DISTRIBUTOR  shall default,  violate,  or be in breach of any loan
     document which  provides,  or which together with other such loan documents
     provides,  working capital or accounts receivable financing for DISTRIBUTOR
     or DISTRIBUTOR's business and such default, violation, or breach results in
     the  termination  of such  financing  at a time  when  no such  replacement
     financing  or  working  capital  is  available  to  DISTRIBUTOR  in amounts
     comparable to that terminated;

          (vi) Each of the events  constituting an Event of Default as set forth
     in subparagraph (e)(ii)(E) of this Paragraph 3; and

          (vii)   DISTRIBUTOR   shall  fail  [***]  times  in  any  twelve  (12)
     consecutive month period to perform in any material respect its obligations
     set forth in subparagraph  24(b), and such failure shall remain uncured for
     [***] days after Notice thereof from PUBLISHER;  or DISTRIBUTOR  shall fail
     any single  time to perform in any  material  respect its  obligations  set
     forth in subparagraph  24(b) and as to which  DISTRIBUTOR shall have failed
     to make reasonable  efforts to commence a cure thereof during the [***] day
     period after Notice of such failure is given by PUBLISHER to DISTRIBUTOR.

     (d)  Notwithstanding the provisions of subparagraph (a) of this Paragraph 3
to the contrary,  the term of this  Agreement  shall be  automatically  extended
beyond the June 30, 2008 termination  date referred to in such  subparagraph (a)
for an  extension  period  of three (3)  years;  provided,  PUBLISHER  agrees in
writing to such  extension 180 days prior to the  expiration of the then current
term.

          (e) (i) Notwithstanding any language to the contrary in the balance of
     this  Paragraph 3, PUBLISHER and  DISTRIBUTOR  agree that the provisions of
     this  subparagraph  (e)  shall  exclusively   govern  with  regard  to  the
     procedures  for  collection  of any sum  actually  or  allegedly  due  from
     DISTRIBUTOR  to PUBLISHER  under any of the  provisions of this  Agreement.
     Accordingly,  no  alleged  or actual  failure  by  DISTRIBUTOR  to make any
     payment to  PUBLISHER  shall in any manner  constitute  an Event of Default
     except as provided in section (ii)(E) of this subparagraph (e).

          (ii) The following procedures shall govern that portion of any Initial
     Advance Payment,  Settlement Payment, or GST refund as to which there is no
     dispute or contest between the parties:

               (A) If PUBLISHER shall not have received  DISTRIBUTOR's  check in
          the amount  determined  by  DISTRIBUTOR  to be owed to PUBLISHER as an
          Initial Advance  Payment or as a Settlement  Payment or as a refund of
          GST net of deductions as solely determined by DISTRIBUTOR  pursuant to
          the terms of Paragraph  15,  ("Missing  Check") on or before the [***]
          business  day after it was to have been  paid in  accordance  with the
          provisions of subparagraph 15(a)(i), 15(a)(ii), or 15(k) as applicable
          (the  "Mailing  Date"),  PUBLISHER  may  give  Notice  to  DISTRIBUTOR

                                       7
<PAGE>

          identifying the  Publication(s) and Mailing Date(s) for which there is
          a Missing Check ("Notice of Non-Receipt").

               (B) If PUBLISHER  shall not have  received a Missing  Check on or
          before the [***]  business day after its Mailing  Date,  PUBLISHER may
          give Notice to DISTRIBUTOR of nonpayment  with respect to such Missing
          Check  ("Notice of Non-  Payment") on or after the [***]  business day
          after the giving of a Notice of Non-Receipt with respect thereto.

               (C) DISTRIBUTOR  shall wire funds to replace any Missing Check on
          or before the second business day after the Notice of Non-Payment with
          respect  to such  Missing  Check  was given to  DISTRIBUTOR  ("Delayed
          Payment  Date")  unless such Missing  Check was  actually  received by
          PUBLISHER  on or  before  such  Delayed  Payment  Date  and a  receipt
          therefor,  signed  by a  PUBLISHER  representative,  shall  have  been
          obtained by DISTRIBUTOR.

               (D) If  PUBLISHER  shall  have  given  DISTRIBUTOR  a  Notice  of
          Non-Payment  and a Notice of  Non-Receipt  with  respect  to a Missing
          Check, and if DISTRIBUTOR shall fail to wire funds to PUBLISHER in the
          amount of such Missing Check on or before the Delayed  Payment Date in
          accordance  with the terms of  subsection  (C) of this  section  (ii),
          PUBLISHER may give Notice to DISTRIBUTOR  of the Final  Opportunity to
          Cure Default (the "Final Notice"). DISTRIBUTOR shall wire funds in the
          amount of the Missing Check on or before the [***]  business day after
          the Final Notice was given (the "Outside Date").

               (E) It shall constitute an Event of Default, if

                    (x)  PUBLISHER  shall have  given the  Notices  required  in
               subsections  (A),  (B),  and (D) of  this  section  (ii),  and if
               DISTRIBUTOR  shall fail to wire funds to  PUBLISHER in the amount
               of a Missing  Check as to which a Final  Notice has been given on
               or before the Outside Date; or

                    (y)  If  in  any  consecutive   twelve  (12)  month  period,
               PUBLISHER  shall have given the Notices  required in  subsections
               (A) and (B) of this  section (ii) and  DISTRIBUTOR  shall fail to
               mail its check in the amount as an Initial  Advance Payment or as
               a Settlement Payment or as a GST refund determined by DISTRIBUTOR
               to be owed  PUBLISHER net of  deductions as solely  determined by
               DISTRIBUTOR  pursuant  to  the  terms  of  Paragraph  15  on  the
               applicable  Mailing Date or shall fail to wire funds to PUBLISHER
               to  replace  the  amount of such  Missing  Check on or before its
               Delayed  Payment Date (either such  occurrence,  a "Late  Payment
               Event") a number of times  equal to the greater of (I) the number
               of Publications  covered by this Agreement on the day of the Late
               Payment Event, or (II) [***].

                                       8
<PAGE>

     A Late  Payment  Event may not be  counted  towards  an Event of Default if
PUBLISHER  did not send  DISTRIBUTOR  Notices  of  Non-Receipt  and  Non-Payment
related  thereto in accordance  with the terms of this  subparagraph  (e). There
shall be rebuttable  presumptions that a check payable to the order of PUBLISHER
which was produced by  DISTRIBUTOR  in the  ordinary  course of its business was
actually mailed the day of such production,  and that a negotiable check payable
to the order of PUBLISHER dated on or before the Mailing Date which was actually
received by PUBLISHER  within [***] business days of the Mailing Date was mailed
on the Mailing Date.

               (F) Notwithstanding  the foregoing,  in no circumstances shall an
          Event of Default be deemed to have  occurred  unless the Missing Check
          is in the  amount  of  [***] or more,  in which  case any such  unpaid
          amount  shall  be  governed  by the  terms  of  section  (iii) of this
          subparagraph (e). Also, it shall not constitute an Event of Default if
          the amount shown to be due on a Publisher  Statement  (as  hereinafter
          defined)  is equal to the amount of  DISTRIBUTOR's  check  tendered to
          PUBLISHER in payment with respect thereto.

          (iii) The  following  procedures  shall govern any payment as to which
     there is a dispute or contest between the parties. Any claim by PUBLISHER

               (A) that the amount  paid by  DISTRIBUTOR  as an Initial  Advance
          Payment or Settlement Payment as reduced by deductions taken therefrom
          by DISTRIBUTOR was incorrect;

               (B)  that the  information  shown on a  Publisher  Statement  was
          incorrect;

               (C) that an Initial Advance Payment or Settlement Payment was not
          made  because  the  information  shown on a  Publisher  Statement  was
          incorrect;

               (D)  that   DISTRIBUTOR's   demand  for   payment   pursuant   to
          subparagraph 15(e) or (h) is incorrect;

               (E) for Missing Checks of less than [***] each or

               (F) for any  alleged  non-payment  by  DISTRIBUTOR  other than as
          provided in section (ii) of this subparagraph (e),

     shall be subject to the dispute resolution provisions of Paragraph 28.

          (iv) Each Notice  given by PUBLISHER  to  DISTRIBUTOR  pursuant to the
     terms of this  subparagraph  (e) shall be clearly  marked with the boldface
     legend,   "NOTICE  PURSUANT  TO  NON-PAYMENT   PROCEDURES  OF  DISTRIBUTION
     AGREEMENT";  shall  not  be  included  with  any  other  information  being
     communicated to DISTRIBUTOR other than another Notice given pursuant to the
     terms of this subparagraph (e); shall identify the Publications and Mailing
     Date to which it refers;  and in the case of a Notice of Non-Payment  and a
     Final Notice,  the necessary  instructions by which  DISTRIBUTOR is to wire
     the necessary  funds to PUBLISHER.  Notice failing to comply with the terms

                                       9
<PAGE>

     of this  section  (iv)  shall be deemed  null and void and not to have been
     delivered to DISTRIBUTOR.

     (f)  Notwithstanding any other provision of this Agreement to the contrary,
PUBLISHER  may  terminate  this  Agreement if at any time during the term hereof
either

          (i) some or all of the  voting  securities  of  DISTRIBUTOR  or all or
     substantially all of the assets of DISTRIBUTOR are sold to

               (A) a  distributor  in the  business  of  buying  magazines  from
          publishers  for resale to, or acting as an agent for publishers in the
          sale or other  distribution of magazines to,  wholesalers or retailers
          of magazines (a "Competitor") or

               (B) to a Person  which is not a  Competitor,  but which has a net
          worth or  shareholders,  equity of less than  Thirty  Million  Dollars
          ($30,000,000); or

          (ii) DISTRIBUTOR merges or consolidates with or into

               (A) any Competitor or

               (B) any Person of the type described in subparagraph (f)(i)(B) of
          this Paragraph 3 . To terminate the Agreement pursuant to the terms of
          this subparagraph  (f),  PUBLISHER shall give Notice to DISTRIBUTOR of
          such  termination not more than ninety (90) days after the date of any
          such sale,  merger,  or  consolidation.  Such Notice  shall  specify a
          specific  termination  date (which may but shall not be required to be
          within such 90-day  period) not less than  fifteen  (15) nor more than
          forty-five (45) days after the date of such Notice.

4. PUBLISHER REPRESENTATIONS
   -------------------------

     (a) PUBLISHER represents and warrants that (i) it is the sole and exclusive
owner  of  all  rights,  including  but  not  limited  to,  copyrights,  titles,
trademarks,   tradenames,  trade  dress,  logos  and  formats,  in  and  to  the
Publication(s)  (collectively,  the "Rights")and that the Rights are not subject
to any liens or  encumbrances  of any nature other than as set forth on Schedule
"C" attached hereto; (ii) the rights herein granted to DISTRIBUTOR have not been
granted to any other person, firm, or corporation with respect to any portion of
the term  hereof;  (iii) it has the  right  and  authority  to enter  into  this
Agreement and to perform the obligations hereunder to be performed by PUBLISHER;
(iv) there are no existing contracts,  agreements or other arrangements which in
any way whatsoever prevent or interfere with the PUBLISHER's making and entering
into  this  Agreement  or  performing  hereunder;  and (v)  that to the  best of
PUBLISHER's  knowledge,  there are no suits or proceedings pending or threatened
against or affecting PUBLISHER which, if adversely determined,  would impair the
rights  herein  granted to  DISTRIBUTOR  or prevent  PUBLISHER  from  performing
hereunder.

     (b) PUBLISHER  represents and agrees that all issues of the  Publication(s)
shall conform  substantially to the respective existing copies thereof exhibited
by PUBLISHER to DISTRIBUTOR;  provided,  however,  that PUBLISHER may change the
size, page count, contents,  format, or Cover Price of any Publication from time

                                       10
<PAGE>

to time during the term hereof if PUBLISHER  believes  that any such change will
inure to the best interests of any of the Publication(s) or of PUBLISHER.

5. FIRST OPTION
   ------------

     (a) DISTRIBUTOR  shall have the first option to purchase from PUBLISHER and
to resell and distribute any and all newly published periodicals or publications
intended to be published by PUBLISHER  during the term of this  Agreement on the
same terms and conditions as set forth in this Agreement. DISTRIBUTOR shall also
have the first option to purchase from  PUBLISHER  and to resell and  distribute
any and all additional  periodicals or publications  acquired by and intended to
be published by PUBLISHER  during the term of this  Agreement,  either (i) after
the expiration of any  distribution  contract with any other party covering such
periodicals and  publications and thereafter on the same terms and conditions as
set  forth in this  Agreement  or (ii) as set  forth in any  other  distribution
contract then in effect with any other distributor  covering the distribution of
such periodicals and publications  until the expiration of its then current term
and thereafter on the same terms and conditions as set forth in this  Agreement.
PUBLISHER shall promptly give DISTRIBUTOR Notice of its intention to publish and
distribute any such additional periodicals or publications and DISTRIBUTOR shall
within  fifteen  (15) days after  receipt of such  Notice,  advise  PUBLISHER of
whether it is willing to distribute such additional periodicals or publications.
If DISTRIBUTOR is willing to do so, each such periodicals or publications  shall
thereafter  be deemed to be a  Publication,  and shall be  governed by the terms
hereof. If DISTRIBUTOR is unwilling to distribute such additional periodicals or
publications,  PUBLISHER  shall  have the  right  and  option  to have each such
periodicals  or  publications  thereafter  distributed  by another  distributor,
without liability to DISTRIBUTOR hereunder.

     (b) In the event  PUBLISHER  exercises  its  option to have the  additional
periodicals or publications  referred to in subparagraph (a) of this Paragraph 5
which   DISTRIBUTOR   is  unwilling  to   distribute,   distributed  by  another
distributor,  and PUBLISHER  receives on a net basis, less for sale of issues of
such  additional   periodicals  or  publications  from  such  other  distributor
performing  the same type of  distribution  services than it would have received
from DISTRIBUTOR pursuant to the terms of this Agreement,  DISTRIBUTOR shall pay
such difference to PUBLISHER thirty (30) days after  DISTRIBUTOR's  receipt of a
copy  of each  settlement  statement  received  by  PUBLISHER  from  such  other
distributor,  subject to  DISTRIBUTOR's  right to audit same and being  supplied
with all information  reasonably  necessary to calculate  and/or verify any such
sums owed. Notwithstanding the foregoing, no such sums shall be due PUBLISHER

          (i) if the  financial  arrangements  between  PUBLISHER and such other
     distributor is the result of bad faith or collusion  between  PUBLISHER and
     such other distributor, or

          (ii) with  respect to any time period  after the  termination  of this
     Agreement.

                                       11
<PAGE>

When the term of any distribution agreements with any such other distributor has
been  completed  and prior to any renewal or new term's taking  effect,  if this
Agreement has not then been terminated,  PUBLISHER shall again offer DISTRIBUTOR
the right to distribute such additional  periodicals or publications on the same
terms and conditions as set forth in this Agreement,  and if DISTRIBUTOR remains
unwilling to distribute such additional periodicals or publications, DISTRIBUTOR
shall  continue  to pay the  amounts  required  pursuant  to the  terms  of this
subparagraph  (b).  If  PUBLISHER  fails  to  offer  DISTRIBUTOR  the  right  to
distribute such additional  periodicals or  publications(s) no sums shall be due
PUBLISHER  pursuant  to the  terms of this  subparagraph  (b) from and after the
termination date of such other distribution agreement.

6. NUMBER OF COPIES, FREQUENCY, AND COVER DESIGNATIONS
   ---------------------------------------------------

     (a) The  number of copies of each issue of each  Publication  to be printed
shall be as PUBLISHER and  DISTRIBUTOR  shall  mutually  agree upon,  and in the
absence of such  agreement,  the product of four (4) multiplied by the aggregate
Publisher's  Gross  Billings and divided by the  aggregate  Publisher's  Billing
Prices for the Measurement Issues of such Publication, determined as of the date
immediately prior to the making of the print order.

     (b) PUBLISHER  agrees to deliver,  or promptly  cause to be delivered,  the
specified number of copies of each issue of the Publication(s) with the assigned
bipad  number and  Universal  Product  Code Symbol to each  Distributor's  Sales
Outlet  designated by  DISTRIBUTOR  in accordance  with  DISTRIBUTOR's  shipping
instructions.

     (c)  PUBLISHER  may,  without  incurring any  liability to  DISTRIBUTOR  on
account thereof, in the exercise of its sole discretion, change the frequency of
publication  of any of the  Publication(s)  from  time to time  during  the term
hereof,  and may, in the  exercise of its sole  discretion,  determine  to cease
publication or production of any Publication either temporarily or permanently.

7. TRANSPORTATION AND RELATED COSTS
   --------------------------------

     PUBLISHER  shall pay  directly  all  transportation  and  insurance  costs.
Canadian GST, import-export charges or tariffs and other duties, relating to the
shipment of each issue of the  Publication(s)  to  Distributor's  Sales  Outlets
shall be advanced by DISTRIBUTOR  and deducted from amounts payable to PUBLISHER
as Settlement  Payments  (except as to Canadian GST which shall be deducted from
Initial  Advance  Payments  and repaid to PUBLISHER  by  DISTRIBUTOR  [***] days
thereafter).

8. PUBLISHER'S BILLING PRICE; FOREIGN CURRENCY
   -------------------------------------------

     (a) The Publisher's  Billing Price shall  initially be calculated  based on
the Cover Price of the Publication as set forth on Schedule "A" attached hereto;
provided, however, that upon any change in the Cover Price of a Publication, the
Publisher's  Billing  Price shall  correspondingly  change  automatically  as to
issues with the changed  Cover  Price so that the ratio of  Publisher's  Billing
Price to Cover Price shall remain  consistent  with that determined by reference
to Schedule "A," as amended to the date of such change.

                                       12
<PAGE>

     (b) All moneys which may be due to PUBLISHER  pursuant to the terms of this
Agreement  shall be paid in U. S. Dollars.  All amounts owed by  DISTRIBUTOR  to
PUBLISHER for sales in Canada or in a Foreign country shall be calculated at the
Exchange Rate as of the third day prior to the date of any such payment.

9. RETURNS
   -------

     (a)  DISTRIBUTOR has the option and is authorized to accept as Returns from
Distributor's  Sales  Outlets  whole  copies,  front  covers,  headings of front
covers,  and affidavits or statements of returns including those  electronically
transmitted,  of the Publication(s).  Except as set forth in subparagraph (c) of
this Paragraph 9, DISTRIBUTOR has the exclusive right to determine the method of
return from Distributor's Sales Outlets.  DISTRIBUTOR is specifically authorized
by  PUBLISHER to destroy or arrange for the  destruction  of said Returns at any
time after receiving same in any manner deemed  suitable by DISTRIBUTOR,  unless
at  least  thirty  (30)  days  prior  to the  On-Sale  Date of any  issue of the
Publication(s),  PUBLISHER  shall  have given  DISTRIBUTOR  Notice in writing of
PUBLISHER's  request that the Returns of such issue be held for thirty (30) days
after the date of the Settlement  Payment with respect thereto so that PUBLISHER
can audit such Returns at its own cost and expense. Such audit and count must be
made by PUBLISHER  during such thirty (30) day period at the particular place of
storage  thereof  maintained  at such  time by  DISTRIBUTOR,  or at  PUBLISHER's
request,  by particular  Distributor's  Sales Outlets.  PUBLISHER  agrees not to
request more than one such audit per year per Publication unless, as a result of
two (2) or more prior such audits,  substantial discrepancies were discovered by
PUBLISHER.

     (b) In the event  that  DISTRIBUTOR  has not  received  all  Returns of any
issue(s)  distributed  hereunder  from any of the  Distributor's  Sales  outlets
because  such outlet (i) is subject to the  appointment  of a receiver,  (ii) is
adjudicated  a bankrupt  after filing of a petition of voluntary or  involuntary
bankruptcy,  (iii) is  reorganized  or  managed  by a trustee  or  committee  of
creditors under the Federal Bankruptcy Act, (iv) is dissolved, terminated, or no
longer in business,  (v) is destroyed by fire, flood or other disaster,  or (vi)
is unable to return all unsold copies of any such issue due to strikes, lockouts
or other labor disputes,  then DISTRIBUTOR shall be entitled to charge PUBLISHER
for  Returns  from such  Distributor's  Sales  Outlet in an amount  equal to the
product of the  difference  between one (1) and the Average Net Sale  Percentage
with respect to the  Measurement  Issues  (calculated  as of the  earliest  date
related to the event  described  in this  subparagraph  (b)  giving  rise to the
inability to receive all such Returns and calculated  separately with respect to
the Distributor's  Sales outlets as to which any such event applies)  multiplied
by the number of copies  received by such  Distributor's  Sales  Outlet for such
issue(s). Nothing contained in this subparagraph (b) shall be or be deemed to be
a  limitation  on the  provisions  of Paragraph 21 with respect to copies of any
issue of a Publication for which DISTRIBUTOR is required to bear any losses from
uncollectible  accounts,  or the fees, costs, or expenses incurred for attempted
collection thereof.

     (c) In the event PUBLISHER desires to receive whole copy Returns, Notice of
the quantities  thereof desired and the address to which such whole copy Returns
shall be sent shall be  supplied to  DISTRIBUTOR  not less than thirty (30) days
prior to the On-Sale Date of such issue.  PUBLISHER shall pay DISTRIBUTOR at the
rate of [***] per copy for packing  and  handling  costs for whole copy  returns

                                       13
<PAGE>

received by  DISTRIBUTOR,  and PUBLISHER  shall  reimburse  DISTRIBUTOR  for all
direct  costs  incurred  by  DISTRIBUTOR,  including  all  shipping  costs,  all
container  costs,  and all costs  charged by  Distributor's  Sales  Outlets  for
arranging,  receiving and  delivering  such whole copy Returns.  Upon receipt of
such Notice requesting whole copy returns, the sole obligation of DISTRIBUTOR in
this regard  shall be to make  written  request for the same from  Distributor's
Sales Outlets,  it being  understood  and agreed that nothing  herein  contained
shall require DISTRIBUTOR to take any other action with respect to such request.

10. RDA
    ---

     (a)  DISTRIBUTOR is authorized to offer on PUBLISHER's  behalf  PUBLISHER's
RDA  Program.   PUBLISHER  agrees  to  delineate  the  terms,  provisions,   and
limitations  thereof,  and to execute  any  documents  reasonably  necessary  in
connection  therewith.  PUBLISHER may, on a prospective  basis,  discontinue any
such RDA Program at any time upon thirty (30) days' Notice to DISTRIBUTOR,

     (b) PUBLISHER shall act on its own account or designate an agent to pay all
amounts  due under the RDA  Program  and  PUBLISHER  shall pay to such  agent on
demand any and all amounts  paid or due to be paid by such agent on  PUBLISHER's
behalf to retailers  participating  in such RDA Program.  DISTRIBUTOR  agrees to
serve as such agent, if requested to do so by PUBLISHER in writing.  Even if not
so designated,  DISTRIBUTOR  shall provide the information and support otherwise
required pursuant to the terms of this Paragraph 10 without charge.

     (c) All RDA payments on behalf of PUBLISHER shall be combined with payments
due to retailers  from  Affiliates  of PUBLISHER and will be paid by such paying
agent.

     (d)  PUBLISHER  shall  provide  DISTRIBUTOR  with  blank  checks  on a form
mutually  agreeable to PUBLISHER and DISTRIBUTOR so that DISTRIBUTOR can produce
the checks for  signature  and mailing by such agent to the  retailers  or their
consultants.  The  checks  shall  show data  consistent  with that  provided  by
DISTRIBUTOR  to retailers for  comparable  programs  offered by other  publisher
clients administered by DISTRIBUTOR.  Alternatively,  at PUBLISHER'S request and
option, DISTRIBUTOR shall, in lieu of drawing and producing such checks, deliver
to PUBLISHER  (or  PUBLISHER'S  agent) all such  information  as is available to
DISTRIBUTOR  in such  electronically  encoded form as is used by  DISTRIBUTOR in
producing such checks.

     (e) DISTRIBUTOR shall issue an RDA claim form to participating retailers on
PUBLISHER'S behalf in a form reasonably acceptable to DISTRIBUTOR and PUBLISHER.
When the claim forms are received from the participating  retailers  DISTRIBUTOR
will process them in the same manner as all other claims received by DISTRIBUTOR
for its other publisher  clients,  including all audit programs,  and review and
verification  procedures  used by  DISTRIBUTOR.  RDA analytical  reports will be
produced  by  DISTRIBUTOR  in the same  manner  as is done for  other  publisher
clients of DISTRIBUTOR as to title, issue,  retailer and summaries of all claims
by title and issue and check registers for the payments to be made.


                                       14
<PAGE>

     (f)  DISTRIBUTOR is authorized to offer on PUBLISHER's  behalf  PUBLISHER's
Advance  RDA  Program to the  retailers  approved  in writing by  PUBLISHER  and
participating  in such  Advance RDA  Program.  The  Advance RDA Program  will be
administered  for  PUBLISHER's  issues  subject to the Advance RDA Program  (the
"Advance RDA Issues") in accordance with the following  terms,  provisions,  and
limitations:

          (i) The initial  Advanced  RDA (the  "Advanced  RDA") will be based on
     final  sales of issues on sale as  provided to  PUBLISHER  by  DISTRIBUTOR.
     PUBLISHER  will calculate and provide to DISTRIBUTOR in writing the initial
     monthly Advanced RDA per title and issue.

          (ii) DISTRIBUTOR will invoice  PUBLISHER for Advanced RDA on the first
     day of each month for Advance  RDA Issues on sale  during such month.  Such
     invoice will be in accordance  with Exhibit "X" attached  hereto and made a
     part hereof.  Payment by PUBLISHER to DISTRIBUTOR for the invoiced Advanced
     RDA amount is due by the last day of such month.

          (iii)  Any  additions  or  deletions  of  Retailers  participating  in
     PUBLISHER's  Advance RDA  Program is to be first  agreed upon in writing by
     the parties  thereto  with such  written  agreement  thereupon  becoming an
     Amendment to this Agreement

          (iv) By the last  business day of the fifth  calendar  month after the
     end of each  calendar  year  quarter  during  the  term  of this  Agreement
     DISTRIBUTOR will reimburse  PUBLISHER for all monthly Advanced RDA payments
     paid  by  PUBLISHER  to   DISTRIBUTOR   during  such   quarter.   Following
     DISTRIBUTOR's payment of the aforementioned reimbursement,  DISTRIBUTOR may
     invoice  PUBLISHER  solely for amounts actually claimed for such reimbursed
     quarterly  period.  PUBLISHER will pay  DISTRIBUTOR's  invoice within [***]
     days of  receipt  thereof.  PUBLISHER  reserves  the right to  deduct  from
     subsequent  payment of DISTRIBUTOR's  invoice(s)  amounts in dispute due to
     errors  made by  DISTRIBUTOR  in  calculation  of  such  amounts  based  on
     PUBLISHER's  review of sales data  accompanying  each invoice.  DISTRIBUTOR
     will  supply  to  PUBLISHER  with  each  invoice  a report in hard copy and
     Microsoft  Excel(R) file format in the form of Exhibit "Y" attached  hereto
     showing by retail chain, wholesaler, title and issue the final sales of the
     Advanced RDA Issues reflected in the invoice.

          (v)  Using  sales  data  available  to  it,  PUBLISHER  shall  provide
     Distributor with adjustments to Advanced RDA by submitting such adjustments
     in  writing to  DISTRIBUTOR  ten (10) days in advance of the 1st day of the
     month.   PUBLISHER's   Advanced  RDA  adjustments   shall  be  adjusted  by
     DISTRIBUTOR  in its next  monthly  invoice to PUBLISHER  for Advanced  RDA.
     DISTRIBUTOR  may only  make  adjustments  to  Advanced  RDA with the  prior
     written consent of PUBLISHER.

                                       15
<PAGE>

     (g) DISTRIBUTOR  agrees to provide PUBLISHER with the following services in
PUBLISHER's performance of audits of RDA programs:

     (i)  DISTRIBUTOR  will assist PUBLISHER in up to [***] RDA audits per year.
          This assistance will include the use of DISTRIBUTOR's  regional and/or
          district field  personnel as mutually  agreed upon by DISTRIBUTOR  and
          PUBLISHER.

     (ii) Upon  reasonable  request  of  PUBLISHER,   DISTRIBUTOR  will  provide
          PUBLISHER  with all RDA data  pertinent to PUBLISHER that is available
          in DISTRIBUTOR's system.

11. DISCOUNTS AND ALLOWANCES
    ------------------------

     PUBLISHER  shall pay  DISTRIBUTOR,  as deductions  from amounts  payable to
PUBLISHER as Settlement  Payments,  for any and all  discounts  and  allowances,
which  are in  excess  of  DISTRIBUTOR's  national  billing  discount  for  each
Publication,  made by  DISTRIBUTOR  to any of  Distributor's  Sales  Outlets  in
locations where special labor conditions  and/or other situations and conditions
exist causing such discounts or allowances;  provided,  however,  that PUBLISHER
has agreed to pay such  discounts  and  allowances  in advance in writing.  Such
discounts  and  allowances  in  effect  on the  Effective  Date are set forth on
Schedule "E" attached  hereto and the parties hereby agree to such discounts and
allowances.

12. RISK OF LOSS; SHORTAGES, ETC.
    -----------------------------

     (a) Any loss, shortage, destruction of, or damage to copies of any issue(s)
of each Publication  shall at all times be at the risk of and be borne solely by
PUBLISHER  until  delivery  to   Distributor's   Sales  Outlets  by  PUBLISHER'S
designated motor carrier (the "Carrier") and acceptance by  Distributor's  Sales
Outlets.  No such delivery  shall be deemed to have been accepted by Distributor
Sales Outlet if such Outlet has reported a loss or shortage in  accordance  with
the reporting procedures then in use by the Carrier.  Subject to the limitations
set forth below in this subparagraph (a) DISTRIBUTOR shall be entitled to charge
PUBLISHER's  account with DISTRIBUTOR for such copies for which  DISTRIBUTOR has
paid PUBLISHER,  and same may be deducted by DISTRIBUTOR from any sums otherwise
due  PUBLISHER.  DISTRIBUTOR  shall  provide  prompt  Notice to PUBLISHER  after
receipt of any claim for loss,  shortage,  destruction of or damage to copies of
any issues of the  Publication(s)  as to which  DISTRIBUTOR  believes  PUBLISHER
bears the risk of loss pursuant to the terms of this  subparagraph  12(a).  Upon
PUBLISHER's request,  DISTRIBUTOR shall furnish to PUBLISHER all information and
documents which  DISTRIBUTOR  may have with respect to any such loss,  shortage,
destruction  or damage,  including  without  limitation  all bills of lading and
necessary affidavits. The right and responsibility of filing any claims with the
Carrier  shall  belong  solely  to  the  PUBLISHER;   provided,   however,  that
DISTRIBUTOR  shall  assist  PUBLISHER  in the filing of any such claim and shall
execute and deliver to PUBLISHER such assignments,  waivers, and releases to and
with  respect to any such  claim as  PUBLISHER  or such  Carrier's  insurer  may
reasonably request. In the event that DISTRIBUTOR shall recover any part of such
loss,  then the  DISTRIBUTOR  shall  pay over or  credit  the same to  PUBLISHER
promptly.

                                       16
<PAGE>

     (b) From and  after  acceptance  of a  delivery  by a  Distributor's  Sales
Outlet,  DISTRIBUTOR  shall use its best efforts,  consistent  with its standard
operating  procedures,  to cause  all risk of loss to be  borne  solely  by such
Distributor's   Sales  Outlet,   except  as  otherwise   expressly  provided  in
subparagraph  9(b)(v).  If DISTRIBUTOR is  unsuccessful in doing so, such losses
shall be deducted  from amounts due PUBLISHER by  DISTRIBUTOR,  subject to later
adjustment pursuant to the terms of subparagraph (c) of this Paragraph 12.

     (c) Losses  (other than  losses  borne by the  Carrier or by  PUBLISHER  in
accordance  with the terms of  subparagraph  (a) of this  Paragraph 12) shall be
cumulated and calculated  once annually as of July 31 of each year, with respect
to issues of the Publications,  the Settlement Payment Publisher  Statements for
which have been  issued as of such date and shall be borne as between  PUBLISHER
and DISTRIBUTOR as follows:

<TABLE>
<S>       <C>                                 <C>                                <C>

          Amount of Loss as a
          Percentage of Publisher's
             Gross Billings                   PUBLISHER'S Loss                   DISTRIBUTOR'S Loss
          -------------------------           ----------------                   ------------------


(A)       [***] or less                       100% of the amount of the loss     0% of the amount of the loss

(B)       More than [***] but not            [***] of Publisher's Gross         [***] of the amount by which the
          more than [***]                     Billings, plus [***] of the        loss exceeds [***] of Publisher's
                                              amount by which the loss exceeds   Gross Billings and multiplied by
                                              [***] of Publisher's Gross         Average Net Sale Percentage
                                              Billings and multiplied by
                                              Average Net Sale Percentage

(C)       More than [***]                     [***]of Publisher's Gross          [***] of Publisher's Gross
                                              Billings.                          Billings plus [***]of the amount
                                                                                 by which the loss exceeds [***]
                                                                                 of Publisher's Gross Billings and
                                                                                 multiplied by Average Net Sale
                                                                                 Percentage.
</TABLE>


DISTRIBUTOR  shall be entitled to receive from  PUBLISHER an amount equal to the
total loss borne by DISTRIBUTOR  pursuant to the terms of this  subparagraph (b)
multiplied  by [***].  DISTRIBUTOR  shall  credit  PUBLISHER  with the amount of
DISTRIBUTOR's  loss minus the amount collected in the preceding sentence and add
such net amount to the next payment due to PUBLISHER hereunder.

13. PROMOTION AND SOLICITATION COSTS
    --------------------------------

     PUBLISHER  shall at its own expense  provide  DISTRIBUTOR  with  reasonable
quantities of promotional  materials for  DISTRIBUTOR's  use as to any promotion
which  PUBLISHER  desires to conduct.  PUBLISHER  shall pay  DISTRIBUTOR for all

                                       17
<PAGE>

reasonable  direct costs in connection  with all  promotional  and  solicitation
mailings  which have been  approved  by  PUBLISHER  in advance  in  writing.  If
PUBLISHER requests  DISTRIBUTOR to incur advertising or promotional  expenses on
behalf  of  PUBLISHER  or for  any of the  Publication(s),  PUBLISHER  shall  be
responsible for all such expenses.

14. MISCELLANEOUS CHARGES
    ---------------------

     PUBLISHER shall pay DISTRIBUTOR for the following charges:

     (a) For each Audit Bureau of  Circulation  ABC State  Circulation  Analysis
requested  by  PUBLISHER  [***],  and for each ABC County  Report  requested  by
PUBLISHER [***].

     (b) For reshipment charges incurred by DISTRIBUTOR at PUBLISHER's request.

     (c) Any other charges or expenses  incurred by DISTRIBUTOR  specifically on
PUBLISHER's  behalf or for its Publication(s) at PUBLISHER's  request,  provided
that all such charges or expenses shall be approved by PUBLISHER in advance.

15. PAYMENTS TO PUBLISHER
    ---------------------

     (a)  DISTRIBUTOR  shall and hereby agrees to pay PUBLISHER the Net Billings
of each issue of each Publication  distributed pursuant to this Agreement,  less
all credits to which DISTRIBUTOR shall be entitled, if any, as follows:

          (i) An "Initial Advance Payment" in an amount equal to [***] (or [***]
     with  respect to  Publications  not  previously  distributed  by a national
     distributor   and  as  to  which  there  are  no  Measurement   Issues)  of
     Distributor's  Estimated Final Net Billings with respect to such issue less
     any GST applicable to such issue and less any Over Advances (as hereinafter
     defined)  shall be paid to  PUBLISHER  on the later of [***] days after the
     Completion  of Shipping or [***] days after receipt by  DISTRIBUTOR  of the
     Printer's  Completion  Notice with respect to such issue, less any Canadian
     GST advanced by DISTRIBUTOR hereunder; and

          (ii) A "Settlement  Payment" in an amount equal to the Net Billings of
     such issue, less

               (A)  the  aggregate  amount  of  all-advance   payments  made  by
          DISTRIBUTOR  to  PUBLISHER  or for its  account  with  respect to such
          issue;

               (B) all  charges,  allowances,  discounts  and other  credits  or
          reimbursements  actually  paid  or  credited  to  Distributor's  Sales
          Outlets  or  others  by  DISTRIBUTOR  to  which  DISTRIBUTOR  shall be
          entitled  pursuant to the terms hereof, or as shall have been approved
          in advance in writing by  PUBLISHER  with  respect to such  issue,  or
          which have been  actually  paid or  credited  to  Distributor's  Sales
          Outlets or others by DISTRIBUTOR for other issues of such  Publication

                                       18
<PAGE>

          and which were not  previously  deducted from a payment by DISTRIBUTOR
          to PUBLISHER;

               (C) all  fees  and  charges  owing by  PUBLISHER  to  DISTRIBUTOR
          pursuant to the terms  hereof for services  performed  by  DISTRIBUTOR
          with respect to such Publication; and

               (D) all other  deductions  permitted  to be taken by  DISTRIBUTOR
          pursuant to the terms of this  Paragraph 15 shall be paid to PUBLISHER
          [***] days after the Off-Sale Date of such issue.

     (b)  DISTRIBUTOR  shall  account and pay to PUBLISHER for Foreign sales and
Returns  separately  from  non-Foreign  sales and Returns.  All Initial  Advance
Payments for Foreign sales payable pursuant to the terms of subparagraph  (a)(i)
of this Paragraph 15 shall be calculated solely with respect to Foreign sales as
set forth on the  Settlement  Payment  Publisher  Statements of the  Measurement
Issues. Notwithstanding the provisions of subparagraph (a)(ii) of this Paragraph
15, the  Settlement  Payment for  Foreign  sales of an issue shall be made [***]
days after the Off-Sale Date of such issue.

     (c) Each Initial  Advance  Payment and  Settlement  Payment,  and any other
amounts paid by DISTRIBUTOR to PUBLISHER pursuant to the terms of this Agreement
shall be  accompanied by a statement  substantially  in the form of Schedule "G"
attached  hereto  or in  such  other  form as  shall  contain  all the  material
information  set forth on such Schedule "G". Each such  statement is referred to
in this Agreement as a "Publisher Statement."

     (d) In the event that any Settlement Payment Publisher  Statement indicates
an amount due  DISTRIBUTOR  ("Overpayment"),  then  DISTRIBUTOR  may deduct such
overpayment  from any  moneys  then due or  thereafter  due  PUBLISHER  from any
payment with respect to a future  issue of the  Publication  giving rise to such
Overpayment.  Any Returns  received  and/or charges or credits  actually paid by
DISTRIBUTOR pursuant to the terms of this Agreement with respect to any issue of
any  Publication(s)  subsequent to the  preparation  of the  Settlement  Payment
Publisher  Statement and prior to the Outside  Deadline for Returns with respect
to such  issue  and not  previously  taken as a credit by  DISTRIBUTOR  shall be
included  as a  credit  to  DISTRIBUTOR  on any  subsequent  Settlement  Payment
Publisher Statement and deducted from any moneys thereafter payable to PUBLISHER
with respect to such Publication.

     (e)  In  addition  to  the  rights  set  forth  in  subparagraph  (d),  any
Overpayment  arising on or with respect to a Publication and any obligation owed
by PUBLISHER to DISTRIBUTOR  pursuant to the terms of subparagraph 16(e) ("Cross
Obligation")  shall be paid by PUBLISHER to  DISTRIBUTOR  within [***]  business
days  after  DISTRIBUTOR  shall  bill  PUBLISHER  therefor,  and if not so  paid
DISTRIBUTOR may deduct such Overpayment or Cross Obligation from any payment due
PUBLISHER hereunder.

     (f) No  advances  or other  payments  shall be  payable by  DISTRIBUTOR  to
PUBLISHER:

                                       19
<PAGE>

          (i)  For  any  issues(s)  for  which  DISTRIBUTOR  has in  good  faith
     exercised its right not to distribute pursuant to Paragraph 19 hereof, or

          (ii)  For  any  issue(s)  of any  Publication  if  PUBLISHER  has  not
     published such issue(s) in accordance with this Agreement, or

          (iii) For the last issue of each  Publication(s)  to be distributed by
     DISTRIBUTOR for PUBLISHER  hereunder except as provided in subparagraph (g)
     of this  Paragraph 15, and provided,  however,  that the provisions of this
     section (iii) shall apply only to the extent reasonably  necessary to repay
     DISTRIBUTOR any amounts owed by PUBLISHER

     (g) The  Settlement  Payment  for  the  last  issue  to be  distributed  by
DISTRIBUTOR  under this Agreement shall be made by DISTRIBUTOR,  to PUBLISHER on
the Outside Deadline for Returns with respect to such issue.

     (h) In any  event,  any  and all  Overpayments  and any  other  amounts  or
obligations  owed by PUBLISHER to DISTRIBUTOR  (including but not limited to any
obligations set forth in subparagraph  16(e)) not theretofore repaid or deducted
by  DISTRIBUTOR  from amounts owed to PUBLISHER  shall be repaid by PUBLISHER to
DISTRIBUTOR [***] business days after demand after termination of this Agreement
or after  [***]  days  after  PUBLISHER  has  ceased  publication  of all of the
Publications.

     (i) The  respective  obligations  of PUBLISHER and  DISTRIBUTOR  under this
Paragraph 15 shall survive the termination of this Agreement.

     (j)  PUBLISHER  shall have the right to challenge any item set forth in any
Publisher  Statement,  provided  that  all  items  which  are  not  specifically
challenged  in  writing  within  [***]  days  of the  date of  delivery  of such
Publisher  Statement shall be deemed binding upon PUBLISHER as an account stated
(except that arithmetic errors need not be challenged until [***] days after the
date of delivery of such Publisher  Statement,  except that reserves for Foreign
Return  Credits  need not be  challenged  until  [***]  days  after  the date of
delivery of such Publisher Statement,  and except that any item which is not set
forth in a manner so as to indicate  the nature and amount of such item need not
be so  challenged  until set forth in such manner in  writing).  For purposes of
this  subparagraph  (j) a  Publisher  Statement  shall be  presumed to have been
delivered  fourteen  (14) days after its due date in the  absence of  compelling
evidence  to the  contrary.  With  respect  to any item which is  challenged  by
PUBLISHER,  the parties shall use their  respective best efforts to identify any
incorrect  or  improper  credits,  charges  or  deductions,  and to  remedy  any
deficiencies resulting therefrom.

     (k)  DISTRIBUTOR  shall remit to PUBLISHER  all GST repayable in accordance
with the terms of Paragraph 7. At  DISTRIBUTOR's  option,  such repayment may be
combined with any other payment  required to be made by DISTRIBUTOR  pursuant to
the terms of this Paragraph 15.

                                       20
<PAGE>

16. INDEMNIFICATION AND GUARANTEE
    -----------------------------

     (a) PUBLISHER  shall  indemnify,  hold harmless and promptly  reimburse the
DISTRIBUTOR,  and  all  of  its  officers,  directors,   employees,  agents  and
representatives  (here  collectively  referred  to as  "Indemnitees"),  from and
against any losses, damages, fines, judgments,  expenditures, claims, reasonable
counsel fees, legal and court expenses,  bond and bail charges and premiums,  as
well as any and all  other  costs  of any  kind or  nature,  resulting  from any
claims,   civil  or  criminal  actions  or  proceedings,   and/or  supplementary
proceedings, or in connection with any inquiries,  proceedings or actions by any
federal,  state,  local and/or any other  governmental  agencies or  authorities
(collectively,  "Claims")  which in anyway relate to, or arise from by or reason
of: (i) the title,  contents or any printed matter  contained  within any of the
Publication(s),  including, but not limited to, editorial contents, photographs,
pictures, cartoons, caricatures, drawings or other artwork, advertisements,  and
classifieds,  whether  contained  on any  cover,  or any  page or  advertisement
contained  in or for  such  Publication(s),  or  any  promotional  material  for
PUBLISHER  or the  Publication(s)  (other than such as may have been  created by
DISTRIBUTOR);   (ii)  the  breach  or  alleged  breach  of  any  of  PUBLISHER's
representations  and warranties  contained in Paragraph 4 of this Agreement,  or
(iii) any act of PUBLISHER  relating to or affecting the distribution or sale of
the  Publication(s)  or the  services  performed  by any of the  Indemnitees  in
connection with any of the Publication(s).

     (b) If any such Claim is brought or made against the aforesaid Indemnitees,
DISTRIBUTOR  shall give PUBLISHER  Notice  thereof as soon as practicable  after
commencement  of  same.   PUBLISHER  shall  undertake  the  defense  thereof  at
PUBLISHER's expense, provided that DISTRIBUTOR has provided the Notice set forth
in the  preceding  sentence.  The failure to give timely Notice shall not affect
DISTRIBUTOR's  rights of indemnification  unless same has materially  prejudiced
the defense of any such Claim.  DISTRIBUTOR  shall have the right to participate
with respect to any such Claim with its own counsel at its own expense,  without
waiver of its rights under this Paragraph 16.

     (c) PUBLISHER  agrees that  PUBLISHER  shall have no right to compromise or
settle any Claim  against  PUBLISHER in which  DISTRIBUTOR  is also named unless
DISTRIBUTOR  receives a release with respect thereto in connection therewith and
unless DISTRIBUTOR receives five (5) days, prior Notice thereof.

     (d)  PUBLISHER  shall  indemnify,  hold  harmless  and  promptly  reimburse
Distributor's  Sales  Outlets  and  their  retail  outlets  (and  all  of  their
respective officers, directors, employees, agents and representatives who shall,
subject to the terms of this subparagraph (d), be deemed to be Indemnitees) from
and against any Claims,  provided  that (i)  DISTRIBUTOR  is or has agreed to be
liable for or to indemnify any such party; (ii) DISTRIBUTOR shall use reasonable
commercial  efforts to cause the  defense of any such  Claim to be  tendered  to
PUBLISHER as soon as practicable after commencement thereof; and (iii) the scope
of the  indemnity  under  this  subparagraph  (d) shall be no  greater  than the
smaller of the indemnity  provided in subparagraph  (a) of this Paragraph 16, or
the scope of the indemnity provided by DISTRIBUTOR to such other party.

                                       21
<PAGE>

     (e) PUBLISHER's obligations hereunder shall survive the termination of this
Agreement.

17. GALLEYS AND SHIPPING INSTRUCTIONS
    ---------------------------------

     DISTRIBUTOR  shall  and  hereby  agrees  to  supply  the  PUBLISHER,  or at
PUBLISHER's  request,  its printer or forwarding agent with one set per issue of
shipment  galleys,   shipping  instructions  and  pre-addressed  mailing  labels
designating  the names and addresses of, and  specifying the number of copies of
each  issue of each  Publication  to be sent  to,  each of  Distributor's  Sales
Outlets,  or computer tapes containing such information  sufficiently in advance
of the  Completion of Shipping with respect to such issue so that such issue can
be shipped to arrive at Distributor's Sales Outlets, receiving point(s) prior to
the On-Sale Date of such issue.

18. ACCESS TO RECORDS
    -----------------

     DISTRIBUTOR  shall give PUBLISHER or its duly  authorized  representatives,
during business hours,  reasonable access to DISTRIBUTOR's draw, sale and Return
figures relating to each issue of the Publication(s) and other necessary records
in support of all items of charges and credits made by  DISTRIBUTOR to PUBLISHER
pursuant  to this  Agreement,  and shall  permit  PUBLISHER  at its own cost and
expense,  to  inspect  and make  copies  of the same and to audit  such  records
relative  to  the  distribution  of any of  the  Publication(s)  subject  to any
limitations  on audit set forth in this  Agreement.  All such  records  shall be
maintained  for a period of twelve (12) months  following  the Off-Sale  Date of
each issue of each Publication.

19. DISTRIBUTOR'S RIGHT TO REFUSE DISTRIBUTION
    ------------------------------------------

     (a)  Anything  to the  contrary  in  this  Agreement  notwithstanding,  the
DISTRIBUTOR  may at any time,  without prior Notice,  and without  incurring any
liability therefor, refuse to distribute any issue of any Publication(s) covered
by this  Agreement,  or at its  option  exercise  the  right to  terminate  this
Agreement,  if such issue, in the reasonable exercise of DISTRIBUTOR's judgment,
contains libelous,  obscene or indecent material,  or invades any person's right
of privacy or other personal  right, or infringes a copyright or trademark owned
by a third  party,  or contains  any matter of any kind that is in  violation of
law, or if such Publication  shall be refused the use of the mails by the United
States  Postal  Service  or such  public  corporation  as may then exist for the
handling of mail,  or if any such issue is refused  entry into the United States
or Canada. In the event DISTRIBUTOR refuses distribution  hereunder with respect
to an issue of a Publication, no payments shall be due PUBLISHER under Paragraph
15 with respect to such issue.  Distribution of any issue of any  Publication(s)
covered by this  Agreement or receipt of  promotional  copies does not and shall
not establish nor  constitute  knowledge or approval by the  DISTRIBUTOR  of the
contents  of such  issue.  The  PUBLISHER  is aware  that  DISTRIBUTOR  does not
regularly  and is not  obligated  to  examine  or pass  upon any  issues  of the
Publication(s).  Nothing  contained in this Paragraph 19 shall affect any rights
of DISTRIBUTOR under Paragraph 16.

     (b)  If   DISTRIBUTOR   exercises  its  right  pursuant  to  the  terms  of
subparagraph  (a) of this  Paragraph  19 to refuse to  distribute  an issue of a
Publication, PUBLISHER shall thereafter for a period of one hundred eighty (180)

                                       22
<PAGE>

days  have  the  right  and  option  to  eliminate  such  Publication  from  the
Publication(s)  covered by this Agreement,  and upon exercise of such option, to
have such  Publication  thereafter  distributed by another  distributor  without
liability to PUBLISHER or DISTRIBUTOR.

20. FORCE MAJEURE
    -------------

     Neither  party  shall be liable  for any  damage  due to causes  beyond its
control,  including  but not limited  to,  acts of civil or military  authority,
orders,  rules or other actions by  appropriate  regulatory  authorities,  labor
difficulties,   fire,   flood,   power  failure,   or  other  natural  or  human
catastrophes, acts of God, national emergencies, quarantine, insurrection, riots
and  failure  of  transportation  and  equipment,  nor shall any of the above be
deemed a default by either party.

21. RELATIONSHIP OF PARTIES
    -----------------------

     It is understood  and agreed that the  relationship  between  PUBLISHER and
DISTRIBUTOR is that of creditor and debtor.  All moneys paid by or due and owing
from  Distributor's  Sales Outlets for copies of Publication(s)  not returned to
DISTRIBUTOR,  are and  shall at all  times  belong to and  remain  the  absolute
property of the  DISTRIBUTOR.  Consequently,  DISTRIBUTOR  shall bear any losses
from  uncollectible  accounts with  Distributor's  Sales outlets,  or with their
retailers  (exclusive  of Returns) and any legal fees or other costs or expenses
incurred for  collection or attempted  collection  therefrom with respect to the
Publication(s).  It is further understood and agreed that DISTRIBUTOR is not the
agent of the PUBLISHER except in connection with any services actually performed
pursuant  to  Paragraph  10 of this  Agreement,  nor is  PUBLISHER  the agent of
DISTRIBUTOR.  Further,  this  Agreement  does not  constitute  and  shall not be
construed as constituting a partnership or joint venture  between  PUBLISHER and
DISTRIBUTOR.  Neither  party  shall have any right to obligate or bind the other
party in any  manner  whatsoever,  except as  otherwise  specifically  set forth
herein,  and nothing  herein  contained  shall give, or is intended to give, any
right of any kind whatsoever to any third persons.

22. ASSIGNMENT, TRANSFERS AND SALE OF RIGHTS, ETC.
    ----------------------------------------------

     (a) Except as otherwise  provided in subparagraph (b) of this Paragraph 22,
PUBLISHER  may not assign this  Agreement  or any rights  hereunder to any other
person,   firm  or  corporation   without  the  prior  written  consent  of  the
DISTRIBUTOR; provided, however,

          (i) Nothing herein  contained shall be construed to prevent  PUBLISHER
     from  assigning  any right to receive  any  advance  or  payment  which the
     DISTRIBUTOR  is required to make to the PUBLISHER  under this  Agreement to
     any single party;

          (ii) Nothing herein contained shall be construed to prevent  PUBLISHER
     from assigning any rights hereunder to any lender as collateral; and

          (iii) Any assignment  made pursuant to this  subparagraph  shall state
     therein  that at all  times  the same is  subject  and  subordinate  in all
     respects to any and all of the rights of DISTRIBUTOR under this Agreement.

                                       23
<PAGE>

     (b) In the event PUBLISHER enters into an agreement to

          (i) sell,  transfer  or  dispose  of all or  substantially  all of the
     assets of PUBLISHER (collectively,  a "Sale"), to another party (other than
     an  Affiliate of PUBLISHER  provided  that such  Affiliate is a party to an
     Affiliate's Distribution Agreement) or

          (ii) sell,  transfer,  assign,  license  or  otherwise  relinquish  or
     dispose of any of its rights to publish any or all of the Publication(s) in
     an English  language  magazine  format  within the Territory and during the
     term  hereof,   or  their  title(s)  or  trademark(s)   covered  under,  or
     distributed pursuant to, this Agreement (collectively, an "Assignment"), to
     another  party (other than an Affiliate  of  PUBLISHER  provided  that such
     Affiliate is a party to an Affiliate's Distribution Agreement),

then any such agreement shall require that either

          (x) any such other party be bound by and affirmatively  assume all the
     obligations  of  PUBLISHER   hereunder   (including   any   liabilities  to
     DISTRIBUTOR  hereunder)  with  respect to all issues of the  Publication(s)
     subject to such Sale or  Assignment  (as the case may be),  the  respective
     Determination  Date(s)  (as  hereinafter  defined)  of which is (are) on or
     after the date of such Sale or Assignment (as the case may be) and that the
     DISTRIBUTOR  be  named  as a third  party  beneficiary  thereof,  or in the
     alternative,

          (y) such other  party  enter into a new  Distribution  Agreement  with
     DISTRIBUTOR on substantially  the same terms and conditions as contained in
     this  Agreement  for a term  equal  to the  then  remaining  term  of  this
     Agreement.

Upon the satisfaction of one of the foregoing alternatives (x) or (y), PUBLISHER
shall be relieved of any and all liability  under this Agreement with respect to
all issues of Publication(s) subject to such Sale or Assignment,  the respective
Determination  Date(s)  of which is (are) on or after  the date of such  Sale or
Assignment;  provided,  however,  that  PUBLISHER  shall not be  relieved of any
existing or estimated obligation or liability to DISTRIBUTOR,  or any subsequent
obligation  or  liability  if  same  concerns   Publications,   the   respective
Determination  Dates  of  which  are on or  before  the  date  of  such  Sale or
Assignment.  Any such  obligation or liability as to which PUBLISHER has no bona
fide dispute or contest or any  obligation or liability of PUBLISHER as to which
PUBLISHER  has no bona fide  dispute or  contest  arising  subsequent  to such a
transaction shall be paid by PUBLISHER to DISTRIBUTOR  within (10) business days
of receipt by PUBLISHER of a statement therefor, and if not so paid, DISTRIBUTOR
may  deduct  such  sum from  any  amounts  due or  thereafter  due to  PUBLISHER
hereunder,  and if no such amounts are due or thereafter become due, DISTRIBUTOR
may deduct such sum from any amounts due or thereafter due to a publisher  which
at such time is an Affiliate of PUBLISHER not earlier than two (2) business days
after the giving of Notice to such  Affiliate as to  DISTRIBUTOR's  intention to
take such deduction.

                                       24
<PAGE>

     (c) For purposes of this  Paragraph 22 the term  "Determination  Date" with
respect to an issue of a Publication shall mean the On-Sale Date, the Completion
of Shipping,  or the date of the  Settlement  Payment  Publisher  Statement with
respect to such issue, as selected by PUBLISHER in its sole discretion, provided
that such selection is  communicated  promptly to  DISTRIBUTOR,  but in no event
later than twenty (20) days before such Determination Date.

     (d)  PUBLISHER  shall not permit any  Affiliate to obtain any of its Rights
until and unless such Affiliate shall have executed an Affiliate's  Distribution
Agreement with respect to Publications using such Rights.

23. ONE-SHOTS AND/OR ANNUALS
    ------------------------

     Any one-shots and/or annuals derived from any of the  Publication(s) as may
hereafter be published shall be included in this Agreement on the same terms and
conditions as set forth herein.

24. OTHER OBLIGATIONS OF DISTRIBUTOR
    --------------------------------

     (a) DISTRIBUTOR shall not commence  distribution,  other than for PUBLISHER
or an Affiliate of PUBLISHER, of magazines or periodicals principally containing
crossword puzzles, fill-in puzzles,  find-a-word type puzzles, sudoku puzzles or
other  similar type  puzzles,  boxing  magazines,  wrestling  magazines or other
similar type  magazines  which are published on the Effective Date by or for any
of the  publishers  identified  on  Schedule  "B"  attached  hereto or any newly
commenced publications by any such identified publisher; provided, however, that
this subparagraph (a) shall not apply

          (i) at any time when PUBLISHER and all Affiliates of PUBLISHER engaged
     in publication of such type  magazines or  periodicals  shall  collectively
     have a market share of less than fifty  percent  (50%) of their  collective
     market share in 2005, or

          (ii) with  respect to any such  magazines  or  periodicals  which have
     since the Effective Date been sold by the respective  publishers identified
     on Schedule "B" to a publisher not on such  Schedule if such  magazines and
     periodicals sold have a collective market share of two percent (2%) or less
     at the time of the commencement of distribution by DISTRIBUTOR.

For purposes of this  subparagraph  (a), the collective  market share in 2005 of
PUBLISHER  and  Affiliates  of  PUBLISHER  engaged in  publication  of such type
magazines or  periodicals  shall be  determined  by reference to sale and Return
data  included  in  market  share  analysis  performed  in  conformity  with the
requirements set forth on Schedule "D".

     (b) DISTRIBUTOR  shall, and hereby agrees,  to provide the services and the
reports identified in Schedule "D" attached hereto.

     (c)  DISTRIBUTOR  shall,  and hereby  agrees,  to designate one employee of
DISTRIBUTOR  reasonably  acceptable  to  PUBLISHER  who  shall be the  exclusive
account executive for PUBLISHER during the term hereof; provided,  however, that

                                       25
<PAGE>

such  exclusive  account  executive  may also serve other  publishers  which are
Affiliates of PUBLISHER,  and further provided that in the event that the number
of Publications covered hereby, and by other agreements similar hereto with such
Affiliates becomes too great for any one account  executive,  DISTRIBUTOR may in
its  discretion   designate  another  such  account  executive,   who  shall  be
non-exclusive.

25. NOTICES
    -------

     (a) Except as otherwise specifically provided herein, all Notices permitted
or  required  to be given  hereunder  shall be in writing  and shall be given by
receipted  personal delivery or Federal Express (or similar  overnight  delivery
service),  at the respective addresses set forth below, or at such other address
or addresses as may be designated by either party.  Such Notices shall be deemed
given  when  delivered  to the  respective  address  set forth  below or to such
overnight  delivery service,  except that a Notice of change of address shall be
effective only from the date of its receipt. A copy of each Notice shall be sent
simultaneously to:

     TO DISTRIBUTOR:                             TO PUBLISHER:

                                                 6198 Butler Pike
                                                 Blue Bell, PA 19422

     Attention:  President                       P.O. Box 736
     505 Park Avenue                             Fort Washington, PA 19034
     New York, NY 10022
                                                 Attention:  Chairman

     with a copy to:                             with a copy to:

     Kable Distribution Services, Inc.           William J. Bonner, Esq.
     Attention:  Vice President                  40 Skippack Pike
     of Finance                                  P.O. Box 736
     Kable Square                                Ft. Washington, PA  19034
     Mount Morris, IL 61054

     as to Notices pursuant to Paragraph 3 to:

     Joseph Moran, Esq.
     AMREP Corporation
     212 Carnegie Center, Suite 302
     Princeton, NJ 08540

     and/or to such other person(s) or addresses as such parties shall designate
to the other by written Notice.

     (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 25
to the contrary,  a Printer's  Completion  Notice may be sent to  DISTRIBUTOR by
telecopier  transmission or electronic  transmission  with  confirmation copy by
first class mail or at  PUBLISHER's  option by  overnight  delivery  service and

                                       26
<PAGE>

shall  be  deemed  given  when so  transmitted,  if  subsequently  confirmed  by
telephone with the addressee or by a signed receipt of the addressee.

26. WAREHOUSING
    -----------

     In the event that any  Publication(s)  or other  materials of PUBLISHER are
stored at DISTRIBUTOR's warehouse,  PUBLISHER agrees to pay DISTRIBUTOR its then
current  handling and storage costs as they may be increased  from time to time.
DISTRIBUTOR  reserves  the  right to limit  the  amount  of  space  allotted  to
PUBLISHER.  PUBLISHER agrees to remove any Publication(s) or other material from
DISTRIBUTOR's  premises  upon thirty (30) days' Notice.  In the event  PUBLISHER
does not remove its property within such thirty (30) day period, DISTRIBUTOR may
remove and dispose of same as it sees fit at PUBLISHER's expense.

27. NON-DISCLOSURE
    --------------

     (a) The parties each acknowledge that the terms and conditions contained in
this Agreement constitute confidential business information, and that therefore,
each agree that  they,  their  representatives,  agents and  employees  will not
disclose  the  terms  and   conditions  of  this  Agreement  to  any  person  or
organization  except as otherwise provided in subparagraph (b) of this Paragraph
27.

     (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 27
to the contrary,

          (i) Either party may disclose the  provisions of this Agreement to any
     potential  purchaser,  assignee,  or licensee of any  Publication  or other
     asset of such party or to underwriters,  accountants,  lawyers,  bankers or
     other lenders,  or such other party or parties as such party may reasonably
     require in the ordinary  course of business;  provided that such  potential
     purchaser, assignee, licensee,  underwriter,  accountant, lawyer, banker or
     other  lender,  or other party agree in writing to hold the  provisions  of
     this Agreement  confidential in the same manner as required by the terms of
     this Paragraph 27;

          (ii) Either  party may disclose the  existence or  provisions  of this
     Agreement if required to do so by any court order or subpoena, or if in the
     reasonable  opinion of its  counsel it is required to do so by any state or
     Federal securities or other law or regulation; and

          (iii) Either party may disclose the  existence or  provisions  of this
     Agreement if any such information has already been publicly disclosed.

28. DISPUTE RESOLUTION FOR CLAIMS.
    ------------------------------

     (a) If PUBLISHER  shall have a claim for  nonpayment of any sums  allegedly
due hereunder against DISTRIBUTOR which DISTRIBUTOR  disputes, or if DISTRIBUTOR
shall have a claim against  PUBLISHER for  nonpayment of any sums  allegedly due

                                       27
<PAGE>

hereunder which PUBLISHER  disputes,  the aggrieved party (the "Claimant") shall
send Notice to the other party of a claim for  nonpayment  (and as to PUBLISHER,
within the time periods permitted by subparagraph 15(j) ("Notice of Dispute'')).

     (b) If the claim for nonpayment is not resolved to the mutual  satisfaction
of both  parties  within  Forty-Five  (45) days  after the  Notice of Dispute is
given, the Claimant may begin binding  arbitration  within twelve (12) months of
the giving of the Notice of Dispute to resolve the claim. The parties agree that
binding arbitration pursuant to the commercial arbitration rules of the American
Arbitration Association under the auspices of its New York City chapter shall be
the exclusive forum for resolving all such claims.

     (c) Arbitration awards may be entered as a judgment in a court of competent
jurisdiction.  Failure to pay an  arbitration  award within fifteen (15) days of
its issuance  shall be grounds for  termination  of this  Agreement by the party
entitled to receive such payment.

     (d) If at any time a Claimant has delivered Notices of Dispute to the other
party with  respect to claims  which  aggregate  One  Hundred  Thousand  Dollars
($100,000) or more, such party must submit all such claims to arbitration within
ninety  (90) days of the  giving of the Notice of  Dispute  with  respect to the
claim which, when aggregated with such other claims,  caused the claims first to
exceed One Hundred Thousand Dollars ($100,000).

     (e)  DISTRIBUTOR  shall retain all its rights to deduct any sums in dispute
from an Initial Advance Payment or a Settlement Payment  notwithstanding receipt
of a Notice of Dispute by  PUBLISHER  demanding  payment of the sum so  deducted
until the claim is resolved or an arbitration  award is entered on such claim in
PUBLISHER's favor.

29. CONSTRUCTION
    ------------

     This  Agreement  shall be governed by and construed in accordance  with the
laws of the  State of New York  applicable  to  agreements  executed  and  fully
performed therein.

30. HEADINGS
    --------

     The headings in this  Agreement are for  convenience  or reference only and
shall not limit or otherwise affect the meaning hereof.

31. GENERAL
    -------

     (a) No waiver of any breach of this Agreement  shall be held to be a waiver
of any other or subsequent  breach.  No waiver,  modification or cancellation of
any term or  condition  of this  Agreement  or any  amendment  thereto  shall be
effective  unless  executed in writing by the party to be charged.  All remedies
afforded by this Agreement (including without limitation, the right to terminate
this  Agreement  where  applicable)  shall be taken and construed as cumulative,
that is, in addition to every other remedy provided herein or by law.

                                       28
<PAGE>

     (b) In the event  that the date on which any  payment  is to be made  under
this Agreement is a Saturday,  Sunday,  or legal  holiday,  the payment shall be
made on the next business day thereafter.

     (c) This  Agreement  shall be  binding  upon the  parties  hereto and their
respective legal representatives, heirs, successors and permitted assigns.

     (d) No oral or other  representations,  understandings  or agreements  have
been made or  relied  upon in the  making of this  Agreement  other  than  those
specifically  set  forth  herein.   This  Agreement,   supersedes  all  existing
agreements by and between the parties hereto and constitutes final expression of
their  agreement with respect to the subject matter hereof and is a complete and
exclusive  statement of the terms thereof.  The express terms hereof shall apply
and supersede any course of performance  between the parties and any practice or
usage of the trade or industry.

     (e) The  Schedules  attached to this  Agreement are  incorporated  into and
hereby made a part hereof.

                         (SIGNATURES ON FOLLOWING PAGE)




                                       29
<PAGE>


     IN WITNESS WHEREOF,  the parties hereto have caused this Agreement executed
by their duly authorized officers, as of the day and year first above written.

KAPPA PUBLISHING GROUP, INC.         KABLE DISTRIBUTION SERVICES, INC.
     "PUBLISHER"                            "DISTRIBUTOR"


By: /s/  William R. Mainwaring       By: /s/  J.W. Roberts
   ------------------------------       ----------------------------------------

 William R. Mainwaring, Treasurer     James W. Roberts, Executive Vice President
- ---------------------------------    -------------------------------------------
     (Print Name and Title)                   (Print Name and Title)

    July 20, 2006                              July 20, 2006
- ---------------------------------    -------------------------------------------
             (Date)                                 (Date)



KAPPA PUZZLE GROUP, INC.             KAPPA ENTERTAINMENT GROUP, INC.
    "PUBLISHER"                              "PUBLISHER"


By: : /s/ William R. Mainwaring     By: : /s/ William R. Mainwaring
     ----------------------------        --------------------------------------


 William R. Mainwaring, Treasurer     William R. Mainwaring, Treasurer
- ---------------------------------   -------------------------------------------
     (Print Name and Title)                (Print Name and Title)


    July 20, 2006                            July 20, 2006
- ---------------------------------   -------------------------------------------
             (Date)                              (Date)



                                       30

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>3
<FILENAME>exh23.txt
<TEXT>

                                                                      EXHIBIT 23
                                                                      ----------

McGladrey & Pullen
Certified Public Accountants




Consent of Independent Registered Public Accounting Firm


We consent to the incorporation by reference in Registration Statement Nos.
33-67114 and 333-17695 of AMREP Corporation on Form S-8 of our report, dated
June 13, 2006, appearing in the Annual Report on Form 10-K of AMREP
Corporation for the year ended April 30, 2006.


/s/McGladrey & Pullen, LLP
- --------------------------
Davenport, Iowa
July 26, 2006
























McGladrey & Pullen, LLP is a member firm of RSM International-
an affiliation of separate and independent legal entities.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>exh31.txt
<TEXT>
                                                                    Exhibit 31.1
                                                                    ------------
CERTIFICATION*
- --------------

I, Peter M. Pizza, certify that:

1.   I have reviewed this annual report on Form 10-K of AMREP Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the Registrant as of, and for, the periods presented in this report.

4.   The  Registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          Registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;
     b)   (paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986);
     c)   evaluated the  effectiveness of the Registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation;  and
     d)   disclosed  in this  report  any  change in the  Registrant's  internal
          control over financial reporting that occurred during the Registrant's
          most recent fiscal quarter (the Registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  Registrant's  internal
          control over financial reporting; and

5.   The Registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the Registrant's auditors and the audit committee of the Registrant's board
     of directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  Registrant's  ability to
          record,  process,  summarize and report financial information;  and
     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  Registrant's  internal
          control over financial reporting.

Dated:   July 27, 2006

/s/ Peter M. Pizza
- ------------------
Peter M. Pizza
Vice President and Chief Financial Officer

- -------------------------------------------
*The  Registrant  is a  holding  company  which  does  substantially  all of its
business through two wholly-owned  subsidiaries (and their subsidiaries).  Those
wholly-owned  subsidiaries  are AMREP  Southwest  Inc.  ("ASW")  and Kable Media
Services, Inc. ("Kable").  James Wall is the principal executive officer of ASW,
and Michael P. Duloc is the principal executive officer of Kable. The registrant
has no chief  executive  officer.  Its  executive  officers  include James Wall,
Senior Vice  President and Peter M. Pizza,  Vice  President and Chief  Financial
Officer,  and Michael P. Duloc, who may be deemed an executive officer by reason
of his position with Kable.



<PAGE>


                                                                    Exhibit 31.2
                                                                    ------------
CERTIFICATION*
- --------------
I, James Wall, certify that:

1.   I have reviewed this annual report on Form 10-K of AMREP Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the Registrant as of, and for, the periods presented in this report.

4.   The  Registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          Registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;
     b)   (paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986);
     c)   evaluated the  effectiveness of the Registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and
     d)   disclosed  in this  report  any  change in the  Registrant's  internal
          control over financial reporting that occurred during the Registrant's
          most recent fiscal quarter (the Registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  Registrant's  internal
          control over financial reporting; and

5.   The Registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the Registrant's auditors and the audit committee of the Registrant's board
     of directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  Registrant's  ability to
          record, process, summarize and report financial information; and
     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  Registrant's  internal
          control over financial reporting.

Dated:   July 27, 2006

/s/ James Wall
- --------------
James Wall


- -----------------------
*The  Registrant  is a  holding  company  which  does  substantially  all of its
business through two wholly-owned  subsidiaries (and their subsidiaries).  Those
wholly-owned  subsidiaries  are AMREP  Southwest  Inc.  ("ASW")  and Kable Media
Services, Inc. ("Kable").  James Wall is the principal executive officer of ASW,
and Michael P. Duloc is the principal executive officer of Kable. The registrant
has no chief  executive  officer.  Its  executive  officers  include James Wall,
Senior Vice  President and Peter M. Pizza,  Vice  President and Chief  Financial
Officer,  and Michael P. Duloc, who may be deemed an executive officer by reason
of his position with Kable.


<PAGE>


                                                                    Exhibit 31.3
                                                                    ------------
CERTIFICATION*
- --------------
I, Michael P. Duloc, certify that:

1.   I have reviewed this annual report on Form 10-K of AMREP Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the Registrant as of, and for, the periods presented in this report.

4.   The  Registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          Registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;
     b)   (paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986);
     c)   evaluated the  effectiveness of the Registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and
     d)   disclosed  in this  report  any  change in the  Registrant's  internal
          control over financial reporting that occurred during the Registrant's
          most recent fiscal quarter (the Registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  Registrant's  internal
          control over financial reporting; and

5.   The Registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the Registrant's auditors and the audit committee of the Registrant's board
     of directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  Registrant's  ability to
          record, process, summarize and report financial information; and
     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  Registrant's  internal
          control over financial reporting.

Dated:   July 27, 2006

/s/ Michael P. Duloc
- --------------------
Michael P. Duloc

- -----------------------
*The  Registrant  is a  holding  company  which  does  substantially  all of its
business through two wholly-owned  subsidiaries (and their subsidiaries).  Those
wholly-owned  subsidiaries  are AMREP  Southwest  Inc.  ("ASW")  and Kable Media
Services, Inc. ("Kable").  James Wall is the principal executive officer of ASW,
and Michael P. Duloc is the principal executive officer of Kable. The registrant
has no chief  executive  officer.  Its  executive  officers  include James Wall,
Senior Vice  President and Peter M. Pizza,  Vice  President and Chief  Financial
Officer,  and Michael P. Duloc, who may be deemed an executive officer by reason
of his position with Kable.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>5
<FILENAME>exh32.txt
<TEXT>


                                                                      Exhibit 32
                                                                      ----------



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection  with the Annual Report of AMREP  Corporation  (the  "Company") on
Form 10-K for the period ended April 30, 2006 as filed with the  Securities  and
Exchange  Commission on the date hereof (the "Report"),  each of the undersigned
does hereby certify,  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

     1.   The Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.




/s/ Peter M. Pizza
- --------------------
Peter M. Pizza*
Date: July 27, 2006

/s/ James Wall
- --------------------
James Wall*
Date: July 27, 2006

/s/ Michael P. Duloc
- --------------------
Michael P. Duloc*
Date: July 27, 2006




- -----------------------
*The  Registrant  is a  holding  company  which  does  substantially  all of its
business through two wholly-owned  subsidiaries (and their subsidiaries).  Those
wholly-owned  subsidiaries  are AMREP  Southwest  Inc.  ("ASW")  and Kable Media
Services, Inc. ("Kable").  James Wall is the principal executive officer of ASW,
and Michael P. Duloc is the principal executive officer of Kable. The registrant
has no chief  executive  officer.  Its  executive  officers  include James Wall,
Senior Vice  President and Peter M. Pizza,  Vice  President and Chief  Financial
Officer,  and Michael P. Duloc, who may be deemed an executive officer by reason
of his position with Kable.

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
