WestPoint International Reports Q4 FY 2006 Losses

WestPoint International Inc. (WPI), an indirect subsidiary of New York City-based American Real
Estate Partners LP (AREP) that comprises AREP’s Home Fashion segment, reported net revenues of
$236.6 million and an operating loss of $40 million in the fourth quarter (Q4) of 2006. These
figures represent a decrease of 18.2 percent and an increase of 131.2 percent, respectively,
compared with Q4 2005 results. The operating loss includes restructuring charges totaling $12

For fiscal year (FY) 2006, WPI reported revenues of $957.6 million and an operating loss of
$150.6 million. As the company did not begin operations until August 2005 as a result of its
acquisition of the assets of West Point, Ga.-based WestPoint Stevens Inc., comparable FY 2005
figures were not available.

Looking forward, AREP reported it expects 2007 will see significantly improved results for WPI,
with gross margins more than doubling from the 6 percent average in 2006. AREP also said it
anticipates earnings before taxes, depreciation and amortization will potentially break even by the
end of 2007.

March 13, 2007