SUNNY ISLES BEACH, Fla.,
Nov. 2, 2021 /PRNewswire/
-- Icahn Enterprises L.P. (Nasdaq: IEP) is reporting third
quarter 2021 revenues of $2.6 billion
and net loss attributable to Icahn Enterprises of $148 million, or a loss of $0.55 per depositary unit. For the three months
ended September 30, 2020, revenues
were $723 million and net loss
attributable to Icahn Enterprises was $714
million, or a loss of $3.14
per depositary unit. Adjusted EBITDA attributable to Icahn
Enterprises was $88 million for the
three months ended September 30,
2021, compared to $(550)
million for the three months ended September 30, 2020.
For the nine months ended September 30,
2021, revenues were $9.0
billion and net loss attributable to Icahn Enterprises was
$122 million, or a loss of
$0.47 per depositary unit. For the
nine months ended September 30, 2020,
revenues were $3.4 billion and net
loss attributable to Icahn Enterprises was $1.8 billion, or a loss of $8.12 per depositary unit. Adjusted EBITDA
attributable to Icahn Enterprises was $715
million for the nine months ended September 30, 2021, compared to $(1.2) billion for the nine months ended
September 30, 2020.
As of September 30, 2021, our
estimate of indicative net asset value was $5.4 billion, compared to $3.6 billion as of December 31, 2020, an increase of $1.8 billion. This was due in part to a change in
how we estimate the fair value of our Automotive segment's owned
real estate value to reflect the improvement of its real estate
leasing operations. We believe this better reflects the estimated
fair value of this segment's assets. Additionally, the change in
our estimate of indicative net asset value includes, among other
things, changes in the fair value of certain subsidiaries which are
not included in our GAAP assets. For additional information, refer
to "Use of Indicative Net Asset Value Data" below.
For the nine months ended September 30,
2021, net income attributable to Icahn Enterprises for our
Investment segment was $375 million
compared to a net loss of $990
million for the nine months ended September 30, 2020.
There are a number of activist positions in the Investment segment
that have recently come to fruition, including Navistar during the
quarter and Cloudera subsequent to quarter end, and we believe
there are several more in the pipeline.
On November 1, 2021, the Board of
Directors of the general partner of Icahn Enterprises happily
declared its 66th consecutive quarterly distribution
since 2005, in the amount of $2.00
per depositary unit, which will be paid on or about December 22, 2021 to depositary unitholders of
record at the close of business on November
16, 2021. Depositary unitholders will have until
December 10, 2021 to make a timely
election to receive either cash or additional depositary units. If
a unitholder does not make a timely election, the unitholder will
automatically be deemed to have elected to receive the distribution
in additional depositary units. Depositary unitholders who elect to
receive (or who are deemed to have elected to receive) additional
depositary units will receive units valued at the volume weighted
average trading price of the units during the five consecutive
trading days ending December 17,
2021. Icahn Enterprises will make a cash payment in lieu of
issuing fractional depositary units to any unitholders electing to
receive (or who are deemed to have elected to receive) depositary
units.
1
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The disclosed
gains represent the aggregate gains of the Investment Funds,
including those attributable to Icahn Enterprises and those
attributable to non-controlling interests in the Investment Funds.
As of September 30, 2021, Icahn Enterprises or its subsidiaries
owned approximately 45% of the Investment Funds.
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Icahn Enterprises L.P., a master limited partnership, is a
diversified holding company engaged in eight primary business
segments: Investment, Energy, Automotive, Food Packaging, Metals,
Real Estate, Home Fashion and Pharma. On October 29, 2021, we announced that we have
entered into an agreement to sell PSC Metals, LLC, our wholly owned
subsidiary through which we operate our Metals segment.
Caution Concerning Forward-Looking Statements
Results for any interim period are not necessarily indicative of
results for any full fiscal period. This release may contain
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. Actual events, results and outcomes may differ
materially from our expectations due to a variety of known and
unknown risks, uncertainties and other factors, including risks
related to economic downturns, substantial competition and rising
operating costs; risks related to the severity, magnitude and
duration of the COVID-19 pandemic and its impact on the global
economy, financial markets and industries in which our subsidiaries
operate; risks related to our investment activities, including the
nature of the investments made by the private funds in which we
invest, declines in the fair value of our investments as a result
of the COVID-19 pandemic, losses in the private funds and loss of
key employees; risks related to our ability to continue to conduct
our activities in a manner so as to not be deemed an investment
company under the Investment Company Act of 1940, as amended; risks
related to our energy business, including the volatility and
availability of crude oil, declines in global demand for crude oil,
refined products and liquid transportation fuels as a result of the
COVID-19 pandemic, 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; risks
related to our automotive activities and exposure to adverse
conditions in the automotive industry, including as a result of the
COVID-19 pandemic; risks related to our food packaging activities,
including competition from better capitalized competitors,
inability of 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 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 (UNAUDITED)
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|
|
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Three Months Ended
September 30,
|
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Nine Months Ended
September 30,
|
|
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2021
|
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2020
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2021
|
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2020
|
|
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(in millions, except
per unit amounts)
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Revenues:
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|
|
|
|
|
|
|
|
|
|
|
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Net sales
|
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$
|
2,657
|
|
$
|
1,764
|
|
$
|
7,487
|
|
$
|
4,951
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Other revenues from
operations
|
|
|
165
|
|
|
163
|
|
|
481
|
|
|
460
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Net (loss) gain from
investment activities
|
|
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(177)
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|
|
(1,259)
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|
|
1,035
|
|
|
(2,152)
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Interest and dividend
income
|
|
|
34
|
|
|
46
|
|
|
94
|
|
|
135
|
Other (loss) income,
net
|
|
|
(33)
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|
|
9
|
|
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(79)
|
|
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(22)
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|
|
|
2,646
|
|
|
723
|
|
|
9,018
|
|
|
3,372
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Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
2,270
|
|
|
1,599
|
|
|
6,807
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|
|
4,544
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Other expenses from
operations
|
|
|
130
|
|
|
127
|
|
|
374
|
|
|
369
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Selling, general and
administrative
|
|
|
317
|
|
|
290
|
|
|
937
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|
|
888
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Restructuring,
net
|
|
|
1
|
|
|
1
|
|
|
6
|
|
|
8
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Impairment
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
6
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Interest
expense
|
|
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158
|
|
|
171
|
|
|
511
|
|
|
517
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|
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2,876
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|
|
2,189
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|
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8,635
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6,332
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(Loss) income before
income tax (expense) benefit
|
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(230)
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(1,466)
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|
|
383
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|
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(2,960)
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Income tax (expense)
benefit
|
|
|
19
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|
|
66
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|
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(57)
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|
|
118
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Net (loss)
income
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(211)
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(1,400)
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326
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(2,842)
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Less: net (loss)
income attributable to non-controlling interests
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(63)
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(686)
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448
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(1,043)
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Net loss attributable
to Icahn Enterprises
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$
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(148)
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$
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(714)
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$
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(122)
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$
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(1,799)
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|
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|
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|
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Net loss attributable
to Icahn Enterprises allocated to:
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|
|
|
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|
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Limited
partners
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$
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(145)
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$
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(700)
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|
$
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(120)
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$
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(1,763)
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General
partner
|
|
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(3)
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|
|
(14)
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|
|
(2)
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|
|
(36)
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|
|
$
|
(148)
|
|
$
|
(714)
|
|
$
|
(122)
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|
$
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(1,799)
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|
|
|
|
|
|
|
|
|
|
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Basic and diluted
loss per LP unit
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|
$
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(0.55)
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|
$
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(3.14)
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|
$
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(0.47)
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|
$
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(8.12)
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Basic and diluted
weighted average LP units outstanding
|
|
|
266
|
|
|
223
|
|
|
253
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|
|
217
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Cash distributions
declared per LP unit
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$
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2.00
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|
$
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2.00
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$
|
6.00
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$
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6.00
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CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
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|
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September 30,
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December 31,
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2021
|
|
2020
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(in
millions)
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ASSETS
|
|
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|
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Cash and cash
equivalents
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$
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1,945
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$
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1,679
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Cash held at
consolidated affiliated partnerships and restricted cash
|
|
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1,747
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|
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1,612
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Investments
|
|
|
9,897
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8,913
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Due from
brokers
|
|
|
5,149
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|
|
3,437
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Accounts receivable,
net
|
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|
598
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|
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501
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Inventories,
net
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|
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1,590
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|
|
1,580
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Property, plant and
equipment, net
|
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4,194
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|
4,228
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Derivative assets,
net
|
|
|
796
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|
|
785
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Goodwill
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|
294
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|
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294
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Intangible assets,
net
|
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|
613
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|
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660
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Other
assets
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1,150
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1,300
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Total
Assets
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$
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27,973
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$
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24,989
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LIABILITIES AND
EQUITY
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Accounts
payable
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$
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829
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$
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738
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Accrued expenses and
other liabilities
|
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1,782
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1,588
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Deferred tax
liabilities
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|
585
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568
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Derivative
liabilities, net
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|
479
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639
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Securities sold, not
yet purchased, at fair value
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4,957
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2,521
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Due to
brokers
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1,622
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|
1,618
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Debt
|
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7,712
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8,059
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Total
liabilities
|
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17,966
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15,731
|
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Equity:
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Limited
partners
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|
4,616
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|
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4,236
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General
partner
|
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(846)
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(853)
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Equity attributable
to Icahn Enterprises
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|
|
3,770
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|
3,383
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Equity attributable
to non-controlling interests
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6,237
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5,875
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Total
equity
|
|
|
10,007
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|
|
9,258
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Total Liabilities
and Equity
|
|
$
|
27,973
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|
$
|
24,989
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Use of Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures in
evaluating its performance. These include non-GAAP EBITDA and
Adjusted EBITDA. EBITDA represents earnings from continuing
operations before interest expense, income tax (benefit) expense
and depreciation and amortization. We define Adjusted EBITDA as
EBITDA excluding certain effects of impairment, restructuring
costs, certain pension plan expenses, gains/losses on disposition
of assets, gains/losses on extinguishment of debt and certain other
non-operational charges. We present EBITDA and Adjusted EBITDA on a
consolidated basis and on a basis attributable to Icahn Enterprises
net of the effects 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 and Adjusted EBITDA 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 certain effects of impairment,
restructuring costs, certain pension plan expenses, gains/losses on
disposition of assets, gains/losses on extinguishment of debt 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 and
Adjusted EBITDA present meaningful measures of performance
exclusive of our capital structure and the method by which assets
were acquired and financed.
EBITDA and Adjusted EBITDA 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 and Adjusted
EBITDA:
- 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 and Adjusted EBITDA differently than we do, limiting their
usefulness as comparative measures. In addition, EBITDA and
Adjusted EBITDA do not reflect the impact of earnings or charges
resulting from matters we consider not to be indicative of our
ongoing operations.
EBITDA and Adjusted EBITDA 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 and Adjusted EBITDA 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 is more indicative of value than our
assets presented in accordance with GAAP. Over the last few years,
we have invested significantly in companies in which we have
majority control, and we believe the market value of these
companies has increased more than is reflected in the change in
their GAAP asset value. Only when we sell companies, as
exemplified by the announcement of our anticipated sale of PSC
Metals, LLC, will our GAAP earnings reflect true market values.
Certain of our real estate assets were valued to reflect estimated
market values which are substantially different from the GAAP asset
values. Please note, however, that the indicative net asset
value does not represent the market price at which the depositary
units trade or the value that we would realize on a sale of the
particular assets, especially those where the value is not based on
trading or market value. Accordingly, data regarding Indicative net
asset value is of limited use and should not be considered in
isolation.
Company's
calculation of Indicative Net Asset Value:
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|
September 30,
|
|
December
31,
|
|
2021
|
|
2020
|
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(in
millions)(unaudited)
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Market-valued
Subsidiaries and Investments:
|
|
|
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Holding
Company interest in Investment Funds(1)
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$ 4,660
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$ 4,283
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CVR
Energy(2)
|
1,186
|
|
1,061
|
Tenneco(2)
|
-
|
|
292
|
Delek(2)
|
134
|
|
-
|
Total
market-valued subsidiaries and investments
|
$
5,980
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|
$
5,636
|
|
|
|
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Other
Subsidiaries:
|
|
|
|
Viskase(3)
|
$ 266
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|
$ 285
|
Real
Estate Holdings(1)
|
435
|
|
440
|
PSC
Metals(4)
|
301
|
|
128
|
WestPoint Home(1)
|
132
|
|
141
|
Vivus(1)
|
262
|
|
262
|
Icahn
Automotive Group(5)
|
-
|
|
1,554
|
Automotive Services(5)
|
763
|
|
-
|
Automotive Parts(5)
|
590
|
|
-
|
Automotive Owned Real Estate Assets(5)
|
1,187
|
|
-
|
Total other
subsidiaries
|
$
3,936
|
|
$
2,810
|
Add:
Other Holding Company net assets(6)
|
9
|
|
(3)
|
Indicative Gross
Asset Value
|
$
9,925
|
|
$
8,443
|
Add:
Holding Company cash and cash equivalents(6)
|
1,257
|
|
925
|
Less:
Holding Company debt(6)
|
(5,810)
|
|
(5,811)
|
Indicative Net
Asset Value
|
$
5,372
|
|
$
3,557
|
|
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.
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(1)
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Represents GAAP
equity attributable to us as of each respective date.
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|
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(2)
|
Based on closing
share price on each date (or if such date was not a trading day,
the immediately preceding trading day) and the number of shares
owned by the Holding Company as of each respective date.
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|
|
(3)
|
Amounts based on
market comparables due to lack of material trading volume, valued
at 9.0x Adjusted EBITDA for the twelve months ended September 30,
2021 and December 31, 2020.
|
|
|
(4)
|
December 31, 2021
represents equity attributable to us. On October 29, 2021, we
announced a definitive agreement to sell PSC Metals, LLC for total
consideration of approximately $290 million (including indebtedness
that will be repaid at closing, and subject to customary working
capital adjustments). September 30, 2021 is based on the
anticipated sales price. The transaction is expected to close by
the end of 2021.
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|
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(5)
|
Prior to Q3 2021, our
presentation of Indicative Net Asset Value with respect to Icahn
Automotive Group ("IAG") was based on the equity attributable to us
as of each respective date. IAG has been in the process of
implementing a multi-year transformation plan, which includes
restructuring of its businesses, including an extensive real-estate
optimization project which resulted in closing underperforming
retail locations in the majority of 216 owned locations. Given the
change in the use of the real estate assets, management determined
a change in how Indicative Net Asset Value is estimated would
provide a more meaningful measure of the assets'
fair-market-value.
|
|
|
|
Management performed
a valuation on the owned real-estate with the assistance of
third-party consultants to estimate fair-market-value. This
analysis utilized property-level market rents, location level
profitability, and utilized prevailing cap rates ranging from 5.5%
to 6.5%. The valuation assumed that triple net leases are in place
for all the locations at rents estimated by management based on
market conditions. There is no assurance we would be able to sell
the assets on the timeline or at the prices and lease terms we
estimate. Different judgments or assumptions would result in
different estimates of the value of the real estate assets.
Moreover, although we evaluate and provide our Indicative Net Asset
Value on a quarterly basis, the estimated values may fluctuate in
the interim, so that any actual transaction could result in a
higher or lower valuation.
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|
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(6)
|
Holding Company's
balance as of each respective date, excluding non-cash deferred tax
assets or liabilities.
|
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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 depositary units as calculated by
management.
|
Adjusted EBITDA
Reconciliations:
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(in
millions)(unaudited)
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
Net
(loss) income
|
($ 211)
|
|
($ 1,400)
|
|
$ 326
|
|
($ 2,842)
|
Interest
expense, net
|
156
|
|
168
|
|
507
|
|
501
|
Income
tax (benefit) expense
|
(19)
|
|
(66)
|
|
57
|
|
(118)
|
Depreciation and amortization
|
126
|
|
126
|
|
385
|
|
379
|
EBITDA before
non-controlling
interests
|
52
|
|
(1,172)
|
|
1,275
|
|
(2,080)
|
Impairment of assets
|
-
|
|
1
|
|
-
|
|
6
|
Restructuring costs
|
1
|
|
1
|
|
6
|
|
8
|
Loss
(gain) on disposition of assets, net
|
20
|
|
(7)
|
|
21
|
|
(7)
|
Other
|
43
|
|
14
|
|
111
|
|
93
|
Adjusted EBITDA
before non-controlling interests
|
$ 116
|
|
($ 1,163)
|
|
$ 1,413
|
|
($ 1,980)
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
attributable to IEP
|
|
|
|
|
|
|
|
Net
loss
|
($ 148)
|
|
($ 714)
|
|
($ 122)
|
|
($ 1,799)
|
Interest
expense, net
|
114
|
|
123
|
|
365
|
|
375
|
Income
tax (benefit) expense
|
(32)
|
|
(55)
|
|
62
|
|
(89)
|
Depreciation and amortization
|
90
|
|
87
|
|
275
|
|
260
|
EBITDA
attributable to IEP
|
24
|
|
(559)
|
|
580
|
|
(1,253)
|
Impairment of assets
|
-
|
|
1
|
|
-
|
|
6
|
Restructuring costs
|
1
|
|
1
|
|
6
|
|
8
|
Loss
(gain) on disposition of assets, net
|
20
|
|
(7)
|
|
21
|
|
(7)
|
Other
|
43
|
|
14
|
|
108
|
|
88
|
Adjusted EBITDA
attributable to IEP
|
$ 88
|
|
($ 550)
|
|
$ 715
|
|
($ 1,158)
|
Investor Contact:
David
Willetts, Chief Financial Officer
(305) 422-4100
View original
content:https://www.prnewswire.com/news-releases/icahn-enterprises-lp-reports-third-quarter-2021-financial-results-301414017.html
SOURCE Icahn Enterprises L.P.