- First quarter 2015 reported revenue of $4.5 billion and
adjusted net income attributable to Icahn Enterprises of $162
million, or an adjusted income of $1.28 per depositary
unit
- First quarter 2015 Adjusted EBITDA attributable to
Icahn Enterprises of $575 million
- Board approves quarterly distribution of $1.50 per
depositary unit
Icahn Enterprises L.P. (Nasdaq:IEP) is reporting first quarter 2015
revenues of $4.5 billion and adjusted net income attributable to
Icahn Enterprises, after adding back the loss on extinguishment of
debt, of $162 million, or $1.28 per depositary unit. For the first
quarter 2014, revenues were $5.0 billion and adjusted net income
attributable to Icahn Enterprises, after adding back the loss on
extinguishment of debt, was $92 million, or $0.77 per depositary
unit. For the first quarter 2015, net income attributable to Icahn
Enterprises was $161 million, or $1.27 per depositary unit as
compared to net loss attributable to Icahn Enterprises of $29
million, or a loss of $0.24 per depositary unit for the first
quarter 2014. Adjusted EBITDA attributable to Icahn Enterprises was
$575 million for the first quarter 2015 compared to $359 million
for the first quarter 2014. Adjusted EBIT attributable to Icahn
Enterprises was $428 million for the first quarter 2015 compared to
$221 million for the first quarter 2014.
On May 5, 2015, the board of directors of the general partner of
Icahn Enterprises declared a quarterly distribution in the amount
of $1.50 per depositary unit. The quarterly distribution is payable
in either cash or additional depositary units, at the election of
each depositary unit holder and will be paid on or about June 30,
2015 to depositary unit holders of record at the close of business
on May 19, 2015.
Mr. Icahn stated: "I am very pleased with our performance for
the first quarter of 2015 with adjusted net income per LP unit
increasing by 66% compared to the first quarter of 2014. Although
we see a number of headwinds with respect to the global economy, we
are optimistic that our investment and operating segments are
positioned for success."
Icahn Enterprises L.P. (Nasdaq:IEP), a master limited
partnership, is a diversified holding company engaged in nine
primary business segments: Investment, Automotive, Energy, Metals,
Railcar, Gaming, Food Packaging, Real Estate and Home Fashion.
Caution Concerning Forward-Looking Statements
Results for any interim period are not necessarily indicative of
results for any full fiscal period. This release contains certain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, many of which are beyond
our ability to control or predict. Forward-looking statements may
be identified by words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates," "will" or words of
similar meaning and include, but are not limited to, statements
about the expected future business and financial performance of
Icahn Enterprises L.P. and its subsidiaries. Among these risks and
uncertainties are risks related to economic downturns, substantial
competition and rising operating costs; risks related to our
investment activities, including the nature of the investments made
by the private funds in which we invest, losses in the private
funds and loss of key employees; risks related to our automotive
activities, including exposure to adverse conditions in the
automotive industry, and risks related to operations in foreign
countries; risks related to our energy business, including the
volatility and availability of crude oil, other feed stocks and
refined products, unfavorable refining margin (crack spread),
interrupted access to pipelines, significant fluctuations in
nitrogen fertilizer demand in the agricultural industry and
seasonality of results; risk related to our gaming operations,
including reductions in discretionary spending due to a downturn in
the local, regional or national economy, intense competition in the
gaming industry from present and emerging internet online markets
and extensive regulation; risks related to our railcar activities,
including reliance upon a small number of customers that represent
a large percentage of revenues and backlog, the health of and
prospects for the overall railcar industry and the cyclical nature
of the railcar manufacturing business; risks related to our food
packaging activities, including competition from better capitalized
competitors, inability of its suppliers to timely deliver raw
materials, and the failure to effectively respond to industry
changes in casings technology; risks related to our scrap metals
activities, including potential environmental exposure; risks
related to our real estate activities, including the extent of any
tenant bankruptcies and insolvencies; risks related to our home
fashion operations, including changes in the availability and price
of raw materials, and changes in transportation costs and delivery
times; and other risks and uncertainties detailed from time to time
in our filings with the Securities and Exchange Commission. Past
performance in our Investment segment is not necessarily indicative
of future performance. We undertake no obligation to publicly
update or review any forward-looking information, whether as a
result of new information, future developments or otherwise.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In millions, except
per unit amounts) |
|
|
Three Months
Ended March 31, |
|
2015 |
2014 |
Revenues: |
(unaudited) |
Net sales |
$ 3,565 |
$ 4,666 |
Other revenues from
operations |
329 |
261 |
Net gain (loss) from investment
activities |
591 |
(31) |
Interest and dividend
income |
53 |
59 |
Other (loss) income, net |
(27) |
35 |
|
4,511 |
4,990 |
Expenses: |
|
|
Cost of goods sold |
3,125 |
4,142 |
Other expenses from
operations |
155 |
129 |
Selling, general and
administrative |
477 |
360 |
Restructuring |
12 |
8 |
Impairment |
1 |
1 |
Interest expense |
270 |
170 |
|
4,040 |
4,810 |
Income before income tax expense |
471 |
180 |
Income tax expense |
(49) |
(103) |
Net income |
422 |
77 |
Less: net income attributable to
non-controlling interests |
(261) |
(106) |
Net income (loss) attributable to Icahn
Enterprises |
$ 161 |
$ (29) |
|
|
|
Net (loss) income attributable to Icahn
Enterprises allocable to: |
|
|
Limited partners |
$ 158 |
$ (28) |
General partner |
3 |
(1) |
|
$ 161 |
$ (29) |
|
|
|
Basic income (loss) per LP unit |
$ 1.28 |
$ (0.24) |
Basic
weighted average LP units outstanding |
123 |
117 |
|
|
|
Diluted income (loss) per LP unit |
$ 1.27 |
$ (0.24) |
Diluted
weighted average LP units outstanding |
124 |
117 |
Cash distributions declared per LP unit |
$ 1.50 |
$ 1.50 |
|
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In
millions) |
|
|
March 31, |
December 31, |
|
2015 |
2014 |
ASSETS |
(unaudited) |
|
Cash and cash equivalents |
$ 2,868 |
$ 2,912 |
Cash held at consolidated affiliated
partnerships and restricted cash |
2,005 |
1,435 |
Investments |
14,869 |
14,500 |
Accounts receivable, net |
1,776 |
1,691 |
Inventories, net |
1,937 |
1,879 |
Property, plant and equipment, net |
9,201 |
8,955 |
Goodwill |
2,048 |
2,000 |
Intangible assets, net |
1,133 |
1,088 |
Other assets |
1,404 |
1,320 |
Total Assets |
$ 37,241 |
$ 35,780 |
LIABILITIES AND EQUITY |
|
|
Accounts payable |
$ 1,427 |
$ 1,387 |
Accrued expenses and other liabilities |
2,713 |
2,235 |
Deferred tax liability |
1,338 |
1,255 |
Securities sold, not yet purchased, at fair
value |
958 |
337 |
Due to brokers |
4,627 |
5,197 |
Post-employment benefit liability |
1,355 |
1,391 |
Debt |
12,088 |
11,588 |
Total liabilities |
24,506 |
23,390 |
|
|
|
Equity: |
|
|
Limited partners |
5,553 |
5,672 |
General partner |
(231) |
(229) |
Equity attributable to Icahn Enterprises |
5,322 |
5,443 |
Equity attributable to non-controlling
interests |
7,413 |
6,947 |
Total equity |
12,735 |
12,390 |
Total Liabilities and
Equity |
$ 37,241 |
$ 35,780 |
Use of Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures in
evaluating its performance. These include non-GAAP EBITDA, Adjusted
EBITDA, EBIT and Adjusted EBIT. EBITDA represents earnings before
interest expense, income tax (benefit) expense and depreciation and
amortization. EBIT represents earnings before interest expense and
income tax (benefit) expense. We define Adjusted EBITDA and
Adjusted EBIT as EBITDA and EBIT, respectively, excluding the
effects of impairment, restructuring costs, certain pension plan
expenses, OPEB curtailment gains, purchase accounting inventory
adjustments, certain share-based compensation, discontinued
operations, gains/losses on extinguishment of debt, major scheduled
turnaround expenses, FIFO adjustments and unrealized gains/losses
on energy segment derivatives and certain other non-operational
charges. We present EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT
on a consolidated basis and attributable to Icahn Enterprises net
of the effect of non-controlling interests. We conduct
substantially all of our operations through subsidiaries. The
operating results of our subsidiaries may not be sufficient to make
distributions to us. In addition, our subsidiaries are not
obligated to make funds available to us for payment of our
indebtedness, payment of distributions on our depositary units or
otherwise, and distributions and intercompany transfers from our
subsidiaries to us may be restricted by applicable law or covenants
contained in debt agreements and other agreements to which these
subsidiaries currently may be subject or into which they may enter
into in the future. The terms of any borrowings of our subsidiaries
or other entities in which we own equity may restrict dividends,
distributions or loans to us.
We believe that providing EBITDA, Adjusted EBITDA, EBIT and
Adjusted EBIT to investors has economic substance as these measures
provide important supplemental information of our performance to
investors and permits investors and management to evaluate the core
operating performance of our business without regard to interest,
taxes and depreciation and amortization and the effects of
impairment, restructuring costs, certain pension plan expenses,
OPEB curtailment gains, purchase accounting inventory adjustments,
certain share-based compensation, discontinued operations,
gains/losses on extinguishment of debt, major scheduled turnaround
expenses, FIFO adjustments and unrealized gains/losses on energy
segment derivatives and certain other non-operational charges.
Additionally, we believe this information is frequently used by
securities analysts, investors and other interested parties in the
evaluation of companies that have issued debt. Management uses, and
believes that investors benefit from referring to these non-GAAP
financial measures in assessing our operating results, as well as
in planning, forecasting and analyzing future periods. Adjusting
earnings for these charges allows investors to evaluate our
performance from period to period, as well as our peers, without
the effects of certain items that may vary depending on accounting
methods and the book value of assets. Additionally, EBITDA,
Adjusted EBITDA, EBIT and Adjusted EBIT present meaningful measures
of performance exclusive of our capital structure and the method by
which assets were acquired and financed.
EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT have limitations
as analytical tools, and you should not consider them in isolation,
or as substitutes for analysis of our results as reported under
generally accepted accounting principles in the United States, or
U.S. GAAP. For example, EBITDA, Adjusted EBITDA, EBIT and Adjusted
EBIT:
- do not reflect our cash expenditures, or future requirements
for capital expenditures, or contractual commitments;
- do not reflect changes in, or cash requirements for, our
working capital needs; and
- do not reflect the significant interest expense, or the cash
requirements necessary to service interest or principal payments on
our debt.
Although depreciation and amortization are non-cash charges, the
assets being depreciated or amortized often will have to be
replaced in the future, and EBITDA and Adjusted EBITDA do not
reflect any cash requirements for such replacements. Other
companies in the industries in which we operate may calculate
EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT differently than we
do, limiting their usefulness as comparative measures. In addition,
EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT do not reflect the
impact of earnings or charges resulting from matters we consider
not to be indicative of our ongoing operations.
EBITDA, Adjusted EBITDA, EBIT and Adjusted EBIT are not
measurements of our financial performance under U.S. GAAP and
should not be considered as alternatives to net income or any other
performance measures derived in accordance with U.S. GAAP or as
alternatives to cash flow from operating activities as a measure of
our liquidity. Given these limitations, we rely primarily on our
U.S. GAAP results and use EBITDA, Adjusted EBITDA, EBIT and
Adjusted EBIT only as a supplemental measure of our financial
performance.
Use of Indicative Net Asset Value Data
The Company uses indicative net asset value as an additional
method for considering the value of the Company's assets, and we
believe that this information can be helpful to investors. Please
note, however, that the indicative net asset value does not
represent the market price at which the units trade. Accordingly,
data regarding indicative net asset value is of limited use and
should not be considered in isolation.
The Company's depositary units are not redeemable, which means
that investors have no right or ability to obtain from the Company
the indicative net asset value of units that they own. Units may be
bought and sold on The NASDAQ Global Select Market at prevailing
market prices. Those prices may be higher or lower than the
indicative net asset value of the units as calculated by
management.
See below for more information on how we calculate the Company's
indicative net asset value.
($ in millions) |
March 31, |
December 31, |
|
2015 |
2014 |
Market-valued
Subsidiaries: |
(unaudited) |
Holding Company interest in Funds (1) |
$ 4,470 |
$ 4,284 |
CVR Energy (2) |
3,030 |
2,756 |
CVR Refining - direct holding (2) |
124 |
101 |
Federal-Mogul (2) |
1,845 |
1,949 |
American Railcar Industries (2) |
590 |
611 |
Total market-valued
subsidiaries |
$ 10,059 |
$ 9,701 |
|
|
|
Other Subsidiaries: |
|
|
Tropicana (3) |
$ 560 |
$ 497 |
Viskase (3) |
210 |
246 |
Real Estate Holdings (1) |
720 |
693 |
PSC Metals (1) |
234 |
250 |
WestPoint Home (1) |
179 |
180 |
ARL (4) |
977 |
944 |
Total - other subsidiaries |
$ 2,880 |
$ 2,810 |
Add: Holding Company cash
and cash equivalents (5) |
826 |
1,123 |
Less: Holding Company debt
(5) |
(5,488) |
(5,486) |
Add: Other Holding Company
net assets (6) |
42 |
237 |
Indicative Net Asset
Value |
$ 8,319 |
$ 8,385 |
Indicative net asset value does not purport to reflect a
valuation of IEP. The calculated Indicative net asset value
does not include any value for our Investment Segment other than
the fair market value of our investment in the Investment
Funds. A valuation is a subjective exercise and Indicative net
asset value does not necessarily consider all elements or consider
in the adequate proportion the elements that could affect the
valuation of IEP. Investors may reasonably differ on what such
elements are and their impact on IEP. No representation or
assurance, express or implied is made as to the accuracy and
correctness of indicative net asset value as of these dates or with
respect to any future indicative or prospective results which may
vary.
(1) Represents equity attributable to us as of each
respective date.
(2) Based on closing share price on each date and the
number of shares owned by the Holding Company as of each respective
date.
(3) Amounts based on market comparables due to lack of
material trading volume. Tropicana valued at 8.0x Adjusted
EBITDA for the twelve months ended March 31, 2015 and 7.5x Adjusted
EBITDA for the twelve months ended December 31, 2014. Viskase
valued at 9.0x Adjusted EBITDA for the twelve months ended March
31, 2015 and December 31, 2014.
(4) ARL value assumes the present value of projected cash
flows from leased railcars plus working capital.
(5) Holding Company's balance as of each respective
date.
(6) Represents Holding Company net assets as of each
respective date.
($ in millions) |
Three Months
Ended March 31, |
|
2015 |
2014 |
Consolidated Adjusted
EBITDA: |
(Unaudited) |
Net income (loss) |
$ 422 |
$ 77 |
Interest expense, net |
266 |
166 |
Income tax expense |
49 |
103 |
Depreciation and
amortization |
204 |
187 |
Consolidated EBITDA |
$ 941 |
$ 533 |
Impairment of assets |
1 |
1 |
Restructuring costs |
12 |
8 |
Non-Service cost US based
pensions |
2 |
(2) |
FIFO impact unfavorable
(favorable) |
25 |
(22) |
Unrealized loss/(gain) on
certain derivatives |
45 |
(88) |
Certain share-based
compensation expense |
3 |
7 |
Net loss on extinguishment of
debt |
2 |
126 |
Other |
(1) |
(37) |
Consolidated Adjusted
EBITDA |
$ 1,030 |
$ 526 |
|
|
|
IEP Adjusted EBITDA: |
|
|
Net income (loss) attributable
to IEP |
$ 161 |
$ (29) |
Interest expense, net |
181 |
133 |
Income tax expense |
35 |
83 |
Depreciation and
amortization |
147 |
138 |
EBITDA attributable to
IEP |
$ 524 |
$ 325 |
Impairment of assets |
1 |
1 |
Restructuring costs |
10 |
6 |
Non-Service cost US based
pensions |
2 |
(2) |
FIFO impact unfavorable
(favorable) |
14 |
(14) |
Unrealized loss/(gain) on
certain derivatives |
26 |
(55) |
Certain share-based
compensation expense |
2 |
4 |
Net loss on extinguishment of
debt |
1 |
121 |
Other |
(5) |
(27) |
Adjusted EBITDA attributable to
IEP |
$ 575 |
$ 359 |
|
|
($ in millions) |
Three Months
Ended March 31, |
|
2015 |
2014 |
Consolidated Adjusted
EBIT: |
(Unaudited) |
Net income (loss) |
$ 422 |
$ 77 |
Interest expense, net |
266 |
166 |
Income tax expense |
49 |
103 |
Consolidated EBIT |
$ 737 |
$ 346 |
Impairment of assets |
1 |
1 |
Restructuring costs |
12 |
8 |
Non-Service cost US based
pensions |
2 |
(2) |
FIFO impact unfavorable
(favorable) |
25 |
(22) |
Unrealized loss/(gain) on
certain derivatives |
45 |
(88) |
Certain share-based
compensation expense |
3 |
7 |
Net loss on extinguishment of
debt |
2 |
126 |
Other |
(1) |
(37) |
Consolidated Adjusted
EBIT |
$ 826 |
$ 339 |
|
|
|
IEP Adjusted EBIT: |
|
|
Net income (loss) attributable
to IEP |
$ 161 |
$ (29) |
Interest expense, net |
181 |
133 |
Income tax expense |
35 |
83 |
EBIT attributable to
IEP |
$ 377 |
$ 187 |
Impairment of assets |
1 |
1 |
Restructuring costs |
10 |
6 |
Non-Service cost US based
pensions |
2 |
(2) |
FIFO impact unfavorable
(favorable) |
14 |
(14) |
Unrealized loss/(gain) on
certain derivatives |
26 |
(55) |
Certain share-based
compensation expense |
2 |
4 |
Net loss on extinguishment of
debt |
1 |
121 |
Other |
(5) |
(27) |
Adjusted EBIT attributable to
IEP |
$ 428 |
$ 221 |
|
|
($ in millions, except per unit amounts) |
Three Months
Ended March 31, |
|
2015 |
2014 |
|
(Unaudited) |
Adjusted Diluted Income per LP
Unit: |
|
|
Net income (loss) attributable to Icahn
Enterprises |
$ 161 |
$ (29) |
Loss on extinguishment of debt attributable
to Icahn Enterprises |
1 |
121 |
Adjusted net (loss) income
attributable to Icahn Enterprises |
162 |
92 |
|
|
|
Diluted income (loss) per LP unit |
$ 1.27 |
$ (0.24) |
Loss on extinguishment of debt attributable
to Icahn Enterprises |
0.01 |
1.01 |
Adjusted diluted income per LP
unit |
$ 1.28 |
$ 0.77 |
CONTACT: Investor Contacts:
SungHwan Cho, Chief Financial Officer
Peter Reck, Chief Accounting Officer
(212) 702-4300
Icahn Enterprises (NASDAQ:IEP)
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